* FTSEurofirst 300 index falls 0.4 percent, Euro STOXX 50 down 0.5 pct
* Bouygues and L'Oreal among worst performers after weak results
* Unease over weak global economy, Jackson Hole persists
LONDON, Aug 29 (Reuters) - European shares fell on Wednesday, led lower by French luxury goods companies Bouygues and L'Oreal which both published disappointing earnings figures.
Worries over the weak economic outlook and nervousness ahead of a key gathering of central bankers on Friday are also weighing on equity markets.
The FTSEurofirst 300 index fell 0.4 percent to 1,084.12 points, while the Euro STOXX 50 index declined by 0.5 percent to 2,430.45 points.
Trading has been choppy in low volume over the past week, as investors weigh up whether the European Central Bank (ECB) will launch sovereign bond purchases or cut interest rates in September, and whether the U.S. Federal Reserve will hint at new quantitative easing measures at Friday's Jackson Hole gathering.
Worries over the timing and extent of any ECB or Fed action have capped gains in equity markets and led some investors to sell shares bought on the cheap in June and July, in case of a stock market fall in September.
"There is plenty of room for disappointment. We still think that the upside remains limited," said Central Markets senior trader Joe Neighbour.
Neighbour recommended selling positions on Germany's DAX index, which was down 0.6 percent at 6,964.24 points, at around the 7,000 point level.
He also backed taking out a "stop loss" order on the DAX at around that mark. A "stop loss" is an order to close out a position at a particular level when the price moves against you.
BOUYGUES AND L'OREAL SLUMP
French conglomerate Bouygues and luxury goods group L'Oreal were among the worst-performing stocks on the FTSEurofirst 300 index, and contributed to a 0.6 percent fall on France's benchmark CAC-40 index.
Bouygues slumped by around 8 percent after posting lower first-half profits on Tuesday after the stock market had closed, with Citigroup keeping a "sell" rating on the stock.
L'Oreal fell 4.2 percent after also reporting earnings slightly below market expectations on Tuesday, which prompted UBS to downgrade the stock to "neutral" from "buy".
Luxury goods companies have been exposed to the weak global economy, highlighted by a slowdown in China and the euro zone's ongoing sovereign debt crisis, which threatens to overwhelm Spain and Italy.
Italian bank Banca Monte dei Paschi di Siena (BMPS) posted a big first-half loss overnight, sending its shares 6 percent lower and leaving the Italian government primed for a big stake in the lender.
Fears have also grown that Spain, which has already agreed to a bailout for its debt-ridden banks, may need a full sovereign rescue.
"Capital and funding pressures in Spain continue to escalate - underscoring the need for ECB and Spanish action," Morgan Stanley analysts wrote in a research note.
They remained "underweight" on southern European bank stocks, preferring instead the likes of Switzerland's UBS , Britain's HSBC, France's BNP Paribas and Swedbank.
"We've got the prospects of further quantitative easing in the United States and a rate cut in Europe, but against that we've got a worsening economic outlook, so we're in limbo for the time being," said Berkeley Futures Ltd associate director Richard Griffiths.