* FTSEurofirst 300 down 0.4 pct, Euro STOXX 50 down 0.3 pct
* China's lower-than-expected PMI weighs on sentiment
* Bayer sags after UK healthcare agency decision
By Blaise Robinson
PARIS, March 24 European stocks slipped in early
trade on Monday, trimming last week's lofty gains, as data
showing China's manufacturing activity contracted in the first
quarter of 2014 revived worries over the outlook for global
Losses were limited by robust data from Germany and figures
showing a recovery in French manufacturing, which fuelled
expectations of a long-awaited rebound in corporate profits in
Europe this year.
But Bayer fell by more than 2 percent, impacting
rival companies such as GlaxoSmithKline, after the
drugmaker was dealt a blow by Britain's healthcare cost agency.
At 0852 GMT, the FTSEurofirst 300 index of top
European shares was down 0.4 percent at 1,302.71 points, after
gaining 1.8 percent last week.
China's flash Markit/HSBC Purchasing Managers' Index (PMI)
fell to an eight-month low of 48.1 in March, a
weaker-than-expected figure. The index has been below the 50
level since January, indicating a contraction in the sector this
"As the data shows this morning, China's slowdown is sharper
than what most people had expected, which fuels worries about
the impact on global growth," said Philippe de Vandiere, analyst
at Altedia Investment Consulting in Paris.
"But Chinese authorities have plenty of tools to avoid a
hard landing, and we know that the country's transition to an
economic model more focused on consumer spending will lower its
growth rate a bit, so no big concern here."
Industrial stocks lost ground, with Siemens down
1.1 percent and Schneider Electric down 0.8 percent.
The Chinese data was partly offset by figures showing French
business activity grew in March at the fastest pace in more than
2-1/2 years, beating forecasts for a further contraction.
Markit's composite PMI jumped in March to 51.6 from 47.9 in
the previous month. Having lagged the recovery in much of the
euro zone in recent months, the index for France surged through
the key 50-point threshold dividing contraction from expansion
to reach its highest level since August 2011.
Germany's private sector also grew in March, although at a
slower rate than in the previous month as both manufacturing and
services industry activity expanded less than expected. The
country's PMI eased to 55.0 in March from February's 56.4, which
was the highest in more than 2-1/2 years.
Around Europe, Britain's FTSE 100 index was down 0.1
percent, Germany's DAX index down 0.3 percent, and
France's CAC 40 down 0.4 percent. The euro zone's
blue-chip Euro STOXX 50 index was down 0.3 percent
at 3,087.22 points.
Shares in Bayer were among the biggest European
blue-chip losers after Britain's National Institute for Health
and Care Excellence recommended the state health service not use
the firm's new prostate cancer drug Xofigo.
Shares in other drugmakers also fell, with GlaxoSmithKline
down 0.6 percent, Roche down 1.3 percent and
Sanofi down 1 percent.
"I am 'underweight' on the healthcare sector. I don't see
much growth and there is too much competition," says Clairinvest
fund manager Ion-Marc Valahu.
Bucking the trend, shares in Deutsche Post rose
3.5 percent in early trade after a report said Chief Executive
Frank Appel would unveil a new profit target of up to 1.6
billion euros ($2.21 billion) for the group's mail business.
Overall, investors' appetite for stocks was also dented by
tensions simmering between the West and Russia.
NATO's top military commander said on Sunday Russia had
built up a "very sizeable" force on its border with Ukraine, and
that Moscow may have a region in another ex-Soviet republic,
Moldova, in its sights after annexing Crimea from Ukraine.
Europe bourses in 2014: link.reuters.com/pad95v
Asset performance in 2014: link.reuters.com/rav46v
Today's European research round-up
(Additional reporting by Sudip Kar-Gupta in London; Editing by