* FTSEurofirst 300 index down 0.2 percent
* Banks lower ahead of ECB decision
* Autonomy up as bid talk resurfaces
* For up-to-the minute market news, click on []
By Joanne Frearson
LONDON, Sept 2 (Reuters) - European shares slipped on
Thursday, after making their biggest daily surge since late May
in the previous session, on caution ahead of the European
Central Bank interest rate decision and U.S. pending home sales.
However, losses were limited, with gains in carmakers
helping to offset falls in the banking sector ahead of the ECB
decision.
By 0854 GMT, the pan-European FTSEurofirst 300 <>
index of top shares was 0.2 percent lower at 1,053.2 points,
after surging 2.9 percent to 1,055.69 points on Wednesday
following upbeat manufacturing data from China and the United
States.
The STOXX Europe 600 Automobiles & Parts <.SXAP> rose 0.7
percent, with Daimler <DAIGn.DE> up 0.9 percent. The German
carmaker said late on Wednesday that U.S. sales of Mercedes Benz
and Smart brand vehicles rose 7.4 percent in August. Separately,
UBS upgraded the stock to "neutral" from "sell".
The ECB is seen keeping rates at a record low of 1 percent
at 1145 GMT. The main interest will be the news conference at
1230 GMT, with the ECB expected to extend its liquidity
safety-net as it confronts a lopsided euro zone recovery and
vulnerable banks in perimeter countries.
"All eyes on the ECB, the market is waiting to see what
opinions they have in the meeting and taking profits before it,"
said Will Hedden, sales trader at IG Index. "But, after
yesterday's strong buying the sentiment seems pretty positive."
Banks featured among the worst performers ahead of the ECB
decision. Spanish banks Banco Santander <SAN.MC> and BBVA
<BBVA.MC> slipped 1.3 percent and 1.1 percent respectively,
while Ireland's Allied Irish Bank <ALBKI.I> fell 1.9 percent.
Elsewhere, French spirits giant Pernod Ricard <PERP.PA>
slipped 2.5 percent. The company said it would focus on cutting
debt and on boosting marketing spend this year to bolster
consumption as the drinks market gradually recovers.
[]
AUTONOMY RISES
Autonomy <AUTN.L> gained 4.4 percent, after traders cited
press reports the software company could find itself at the
centre of a takeover battle between Microsoft <MSTF.O> and
Oracle <ORCL.O>.
Later in the session, investors will watch U.S. data
including weekly jobless numbers and pending home sales, to give
further indications on the strength of the recovery in the
world's biggest economy.
"Yesterday was just a relief rally, the fundamental issues
have not changed and today the market will be weak," said Justin
Urquhart Stewart, director at Seven Investment Management.
"There are still concerns U.S. pending home sales data will be
weak."
Meanwhile, the Euro STOXX 50 <> was 0.2 percent
lower at 2,710.37, holding above a key support level, the 38.2
percent retracement of a fall from an April high to a May low
after breaking through the 23.6 percent retracement level on
Wednesday.
Valuations on the Euro STOXX 50E looked cheap. Its one-year
forward price-to-earnings stood at about 8.9 against a 10-year
average of 14.1, Thomson Reuters Datastream showed.
Across Europe, the FTSE 100 <> index was down 0.03
percent, Germany's DAX <> was 0.2 percent lower and
France's CAC 40 <> was down 0.3 percent.
(Reporting by Joanne Frearson; Editing by Hans Peters)
