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European shares dip on growth fears, Spain doubts

* FTSEurofirst 300 down 0.2 pct, Euro STOXX 50 dips 0.1 pct

* Downward channel on ESTOXX chart taking shape -Aurel BGC

* U.S. jobs data seen as potential positive catalyst

By Blaise Robinson

PARIS, Oct 3 (Reuters) - European stocks dipped early on Wednesday, adding to the previous session's losses, as uncertainty surrounding a potential bailout for debt-stricken Spain and further signs of a slowdown in China rattled investors.

At 0840 GMT, the FTSEurofirst 300

index of top European shares was down 0.2 percent at 1,100.06 points.

Data showed that China's services sector slowed last month to its lowest level in nearly two years, fuelling worries that a drop in the manufacturing sector has started to spread to other areas of the world's No. 2 economy.

Also dampening the mood on Wednesday, purchasing managers indexes (PMIs) signalled the euro zone probably slipped back into recession in the third quarter.

Energy shares were among the top losers, falling along with oil prices on mounting worries over global demand, with Total

down 0.6 percent and ENI slipping 0.5 percent.

"China's exports have been suffering, and at the same time domestic demand is relatively weak. All these emerging countries which used to lead the global economy are losing steam," Saxo Banque senior sales trader Alexandre Baradez said.

"The market is stuck in a consolidation phase, and to get out of it, we need a catalyst. It could be a bailout for Spain, or a good surprise on the job front in the United States."

Investors awaited U.S. ADP jobs data, due at 1215 GMT on Wednesday, a harbinger for Friday's all-important monthly payrolls data.

European stocks have surged since late July, when European Central Bank head Mario Draghi said he was ready to do whatever it took to save the euro, later announcing a bond-buying programme to cut the borrowing costs of struggling states.

The Euro STOXX 50

surged as much as 22 percent, hitting a six-month high in mid-September, but has since lost steam, halted by a raft of gloomy macro data as well as doubts over whether Spain is willing to request a bailout, a condition for the ECB to start buying the country's bonds.

Late on Tuesday, Spanish Prime Minister Mariano Rajoy said a request for such a bailout was not imminent, denying reports that the country was set to officially ask for help at the weekend.

"Stocks have been boosted by the ECB's bond-buying plan, but without a bailout request, this plan won't be activated. We've had the talk, now we need to see the concrete measures activated, otherwise this rally will peter out," Saxo's Baradez said.

Around Europe, the UK's FTSE 100 index

was down 0.1 percent, Germany's DAX index was flat, and France's CAC 40 was off 0.2 percent.

The euro zone's blue chip Euro STOXX 50

index

was down 0.1 percent, at 2,493.22 points, slipping back below a key support level at 2,495.66, the 23.6 percent Fibonacci retracement of the 'Draghi effect' rally started in late July.

"A downward channel is taking shape," Aurel BGC chartist Gerard Sagnier said.

"The index could retrace another 4 to 5 percent of the summer rally. We have a 'reduce' recommendation on the short term, and people should take advantage of the technical rebounds," he said.

(Editing by Susan Fenton)

((blaise.robinson@thomsonreuters.com)(+33.1.4949.5269)(Reuters

Messaging: blaise.robinson.thomsonreuters.com@reuters.net))

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