UPDATE 2-Trade war worries weigh on European shares ahead of Fed

* STOXX 600 down 0.4 pct, DAX down 0.3 pct

* Trade war fears back in focus

* British high st stocks get a hammering

* Fed policy statement due after market close (Recasts, adds details and updates prices)

LONDON, March 21 (Reuters) - European shares slid on Wednesday as worries over a possible trade war soured sentiment and investors awaited the conclusion of a U.S. Federal Reserve meeting for signals on the pace of expected interest rate rises.

The pan-European STOXX 600 index fell further into negative territory, down 0.4 percent by 1315 GMT, as more cyclical sectors such as financials, materials and industrials retreated.

The STOXX dropped sharply following a report in the Wall Street Journal that China was planning counter-measures against U.S. tariffs. Fears of a possible trade war have simmered since U.S. President Donald Trump announced plans to introduce tariffs on steel and aluminium imports.

"The Fed meeting is really the big event of the day. What we're looking out for most is the forward guidance ... it's how the accompanying statement is worded, whether it proves particularly hawkish, whether policymakers are guiding towards four rate hikes this year as opposed to three," said Henry Croft, research analyst at Accendo Markets.

Financials contributed the most to losses, with the European banking sector down 0.8 percent, led lower by a 5.6 percent drop in Deutsche Bank after negative comments from its CFO around the outlook for the first quarter.

Speaking at an investor conference, Deutsche CFO James von Moltke said he expected a 450 million euro ($552.78 million) headwind for its Corporate and Investment Banking business in the first quarter.

European tech stocks declined just 0.1 percent, propped up by gains among semiconductor makers.

The sector has, for now, seen little fallout from the reports of Facebook data misuse that have sent the U.S. social media giant's shares down 10 percent over the past two sessions

French luxury goods maker Hermes jumped 3.4 percent after its profit margin reached a record in 2017 and the company increased its dividend.

It was still doom and gloom in the British retail sector, with Kingfisher down nearly 9 percent after beating full-year earnings forecasts but warning that the UK market was "more uncertain".

Smaller UK stock Moss Bros, which makes men's suits and formalwear, tumbled 21.5 percent after a profit warning while retailer Carpetright said that it was raising capital to try to turn its business around.

Ubisoft rose 4.2 percent after Vivendi sold its entire stake in the video game maker for 2 billion euros ($2.45 billion). Ubisoft has long opposed the French media group's involvement in the company.

Vivendi's shares rose 0.4 percent. (Reporting by Kit Rees editing by Tom Pfeiffer)