European shares hit by weak euro zone manufacturing data

* FTSEurofirst 300 down 0.4 pct, Euro STOXX 50 0.7 pct lower

* Stocks extend losses after German PMI miss

* Technip (Paris: FR0000131708 - news) weighs on France's CAC after CGG (NYSE: CGG - news) bid

* ThyssenKrupp (Xetra: 750000 - news) supports the DAX

By Alistair Smout

EDINBURGH, Nov 20 (Reuters) - European shares fell on Thursday, with top euro zone shares extending an early dip after weak manufacturing data in the region's top two economies reignited fears over growth prospects.

The euro zone's EuroSTOXX 50 fell 0.7 percent after both French and German purchasing manager's index data missed expectations in the manufacturing sector.

France's CAC fell 0.7 percent, with Germany's DAX down 0.5 percent.

Euro zone PMIs confirmed the grim picture for the region, coming in weaker than any forecaster expected this month.

The data comes after German analyst and investor sentiment rose for the first time in almost a year earlier this week, and might dash hopes of an improvement in Europe's biggest economy after it dodged recession in the third quarter.

"It's disappointing, especially after the ZEW economic sentiment figures were much stronger than markets had been expecting," Alastair McCaig, market analyst at IG (LSE: IGG.L - news) , said.

"The data is not backing up sentiment in the euro zone."

French blue-chips underperformed German stocks even though services sector data came in slightly better than expected, hindered by a slump in Technip.

It fell 5.4 percent after the oil and gas engineer said it had bid for CGG. CGG, which is outside the blue-chip CAC, rose 25 percent, saying that the conditions to pursue the Technip offer had not been met.

While services sector data missed expectations, German stocks were supported by ThyssenKrupp, after Germany's biggest steelmaker said it will resume paying dividends a year earlier than expected as it reported its first net profit in four years.

It was up 1.1 percent, having halved gains following the disappointing PMI data.

Although the ThyssenKrupp statement expressed confidence that a tough turnaround was already bearing fruit, the company's profit actually came in slightly below expectations.

The pan-European FTSEurofirst 300 was down 0.4 percent to 1,354.21 by 0904 GMT. Britain's FTSE 100 was down 0.4 percent.

The FTSEurofirst 300 has spent the whole of November in a tight range of just over 40 points.

Europe bourses in 2014: http://link.reuters.com/pap87v

Asset performance in 2014: http://link.reuters.com/gap87v

Today's European research round-up (Editing by Crispian Balmer)