* FTSEurofirst 300 closes 0.6 pct lower; 3rd day of falls
* Retail shares among top fallers, Hennes & Mauritz slips
* Beiersdorf rises after P&G's CEO says interested in firm
By Harpreet Bhal
LONDON, Sept 29 (Reuters) - European shares slipped to a
three-week closing low on Wednesday, with Hennes & Mauritz
<HMb.ST> leading retailers lower after it posted a weak
quarterly profit margin, and as heavyweight banks fell.
H&M shed 6.5 percent after its third quarter profit margins
weakened and as concerns grew over the prospect of more cost
pressures in coming months [].
The STOXX Europe 600 retail index <.SXRP> lost 1.3 percent,
with peers Debenhams <DEB.L>, Next <NXT.L> and Inditex <ITX.MC>
down 0.2 to 1 percent.
The pan-European FTSEurofirst 300 <> index of top
shares closed 0.6 percent lower at 1,064.88 points in the third
straight session of losses.
Gains in the early part of September helped the FTSEurofirst
300 index rise 3.8 percent so far this month, on track to
rebound from a 1.7 percent drop in August.
"Markets are pausing for breath after rallying so strongly
over the last few weeks. If U.S. GDP data tomorrow is weak, we
could see a situation where that could be interpreted as good
news because it increases the likelihood of more quantitative
easing," said James Hughes, strategist at CMC Markets.
Economic data likely to be in focus on Thursday include the
final reading of U.S. second quarter gross domestic product,
which analysts expect to show a growth of 1.6 percent.
Speculation has been mounting that the U.S. Federal Reserve
officials could embark on a second wave of quantitative easing
to support a sluggish economic recovery. []
Data from the United States earlier on Wednesday showed
mortgage applications fell for a fourth straight week,
reflecting the inability of many homeowners to take advantage of
record low interest rates. []
"The incoming economic numbers are mixed, with some
surprising on the positive side and some on the negative side.
That keeps investors guessing how significant the economic
growth slowdown will be," said Tammo Greetfeld, equity
strategist at UniCredit.
BEIERSDORF STRONG
Helping limit further losses, Beiersdorf <BEIG.DE> rose more
than 10 percent, before paring gains, after Procter & Gamble's
<PG.N> chief executive was quoted as saying he was interested in
buying the maker of Nivea skin cream. The German firm, however,
said it was not aware of P&G's interest. []
Heavyweight BP <BP.L> was in demand, up 3.9 percent, after
saying it was to fundamentally restructure itself in the wake of
the Gulf of Mexico spill. []
On the downside, metals group Vedanta Resources <VED.L> fell
4.3 percent after its Sterlite Industries unit was ordered by a
court to shut its Tuticor copper smelter in south India.
[]
Banks were also lower, with Barclays <BARC.L>, Societe
General <SOGN.PA> and Deutsche Bank <DBKGn.DE> down 1.2 to 3.4
percent.
The VDAX-NEW volatility index <.V1XI>, one of Europe's main
barometers of investor anxiety, rose 1.7 percent but remained in
a tight range where it has oscillated for nearly a month. The
chart suggested an imminent spike in volatility that could mean
a stock market pull-back.
The higher the volatility index, based on sell- and
buy-options on Frankfurt's top-30 stocks <0#.GDAXI>, the lower
investors' appetite is for risky assets such as equities and
commodities.
(Additional reporting by Atul Prakash; Editing Louise Heavens)
