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European shares fall, brace for gloomy earnings

* FTSEurofirst 300 down 0.5 pct, Euro STOXX 50 down 1 pct

* IMF estimate cuts sets bleak backdrop for U.S. earnings season start

* Moller-Maersk down 2.1 pct as it cuts container shipping exposure

By Francesco Canepa

LONDON, Oct 9 (Reuters) - European shares fell in thin trade on Tuesday as gloomy economic data and corporate reports set the backdrop for a tough start to the third-quarter reporting season in the United States.

Shares in A.P. Moller-Maersk

fell 2.1 percent in volume nearly twice the average as the Danish oil and shipping group cited sluggish economic conditions and overcapacity for its decision to cut its exposure to the container shipping industry.

The broader FTSEurofirst 300

index fell 0.5 percent to 1,095.95 points in a broad-based selloff as the International Monetary Fund cut its expectations for global growth and investors fretted the U.S. earnings season may dent expectations the world's largest economy is recovering.

Aluminium producer Alcoa

was forecast to send the U.S. earnings season off to a sombre start later on Tuesday, with weak metal demand likely wiping out its third-quarter net profit.

"Expectation for the earnings season is muted," Manish Singh, head of investment at Crossbridge Capital, said.

"We need more confirmation (the U.S. economy is bottoming out) before according higher multiples to earnings."

Companies listed in the U.S. S&P 500

index, expected to show the first profit decline in three years, were trading at 12.9 times their expected earnings for the next 12 months, below a 25-year average of 14.9 but well above last year's trough of just over 10, according to Thomson Reuters data.

Euro zone shares in an MSCI index were trading at a lower multiple of 10.5 times, although their discount to Wall Street's stocks was broadly in line with the average discount since 2002 at 20 percent despite worse economic prospects in Europe

. SPANISH FEVER

The euro zone debt crisis weighed on the blue-chip Euro STOXX 50

index, which closed down 1 percent at 2,472.23 points, as Spain continued to resist market pressure to ask for a sovereign bailout needed to kick-start a European Central Bank plan to buy the country's bonds on the secondary market.

Yields on Madrid's 10-year bonds rose, dragging Spain's Ibex 35 index

index down 1.9 percent, the worst performer among western European indices.

Bucking a selloff among cyclical stocks, basic resources shares

rose 1 percent as miner Rio Tinto

,

forecast solid copper output growth in coming years.

Also supporting the sector was a 265 billion yuan ($42.15 billion) cash injection by the Chinese central bank and trader speculation about big infrastructure investments from China, the world's largest consumer of metals, to shore up the economy.

"The Chinese don't just print (money)...they build things," Justin Haque, a pan-European trader at Hobart Capital Markets, said. "Chinese steel furnaces are cranking up output despite a massive inventory to appease the people."

Haque recommended buying Rio Tinto, up 1.5 percent at 3,036 pence on Tuesday, the world's second-largest iron ore miner with more than 80 percent of its earnings in 2012 expected to come from the material.

He flagged the stock was showing technical strength after perching through its 50-day moving average at 2,998 pence and said it could rise as high as it 200-day moving average at 3,230 pence.

(Reporting By Francesco Canepa; editing by Ron Askew)

((francesco.canepa@thomsonreuters.com)(0044)(0)(2075423871)(Reu

ers Messaging: francesco.canepa.thomsonreuters.com@reuters.net))

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