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European shares edge lower, all eyes on Spain

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

* Spanish stocks under pressure on bailout uncertainties

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

By Blaise Robinson

PARIS, Oct 3 (Reuters) - European stocks edged down on Wednesday, adding to the previous session's losses, weighed down by doubts about whether Spain will soon request a bailout and further signs of a slowdown in China and Europe.

At 1126 GMT, the FTSEurofirst 300

index of top European shares was down 0.1 percent at 1,100.73 points in relatively low volumes.

Spanish stocks were among the biggest losers, with BBVA

down 1 percent and Banco Santander

down 0.9 percent.

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

European stocks have surged since late July, when European Central Bank head Mario Draghi said he was ready to do "whatever it takes" 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 by 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.

"The question is not if there will be a bailout, but when it will happen," FXCM analyst Nicolas Cheron said.

"Investors seem confident that a bailout would ease the tensions, but I think on the contrary that it will be a real sword of Damocles. The risk is to see it trigger social unrest in Spain and maybe other countries. I recommend using all the rebounds to sell," he said.

Grim data also rattled investors on Wednesday, with figures showing China's services sector slowed last month to its lowest level in nearly two years fuelling worries that a drop in manufacturing has started to spread to other areas of the world's No. 2 economy.

In Europe, 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 Repsol down 0.8 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."

Investors were looking ahead to U.S. ADP jobs data, due at 1215 GMT on Wednesday, for clues on Friday's all-important monthly payrolls data.

Around Europe, the UK's FTSE 100 index

was up 0.1 percent, Germany's DAX index up 0.1 percent, and France's CAC 40 was down 0.2 percent. The blue chip Euro STOXX 50

index was down 0.1 percent, at 2,492.45 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 Hugh Lawson)

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

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

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