China concerns resurface, weakening European stocks

* FTSEurofirst 300 down 0.8 percent

* All sectors in negative territory

* Chipmakers knocked by report of Apple (LSE: 0R2V.L - news) production cut

* French advertisers hit by downgrades

By Alistair Smout

LONDON, Jan 6 (Reuters) - European stocks fell on Wednesday, hit by weakness in the commodity sector as concerns over the Chinese economy resurfaced after it allowed the yuan to weaken further and poor services sector data was reported.

The FTSEurofirst 300 was down 0.8 percent at 1,398.76 and has fallen 2.7 percent this week

Declines were broad-based, with all STOXX 600 sectors in negative territory.

However, basic resources stocks, including miners, down 2.2 percent, were the biggest sectoral faller.

Miners came under pressure after the People's Bank of China (HKSE: 3988-OL.HK - news) set a weaker midpoint for the yuan, prompting concerns that the economy of the world's largest metals consumer could be in worse shape than believed.

A survey showed that China's services sector expanded at its slowest pace in 17 months in December, following on from weak factory data on Monday which also knocked markets globally.

"Weakness in China's economy isn't new... but China's reaction function seems limited at this stage. They have to focus on weakening the currency, rather than adopting the massive stimulus that some might hope and pray for," said Ioan Smith, managing director of KCG Europe.

"We may subdued commodity prices and therefore continued weakness in the commodity related names."

Risk appetite was also dampened after North Korea said it had successfully conducted a test of a nuclear device on Wednesday morning, marking a significant advance in the isolated state's strike capabilities and raising alarm bells in Japan and South Korea.

In the technology sector, chipmakers fell after a report that Apple was expected to cut production of some iPhone models this quarter.

Infineon (Xetra: 623100 - news) fell 4.3 percent, also suffering from a downgrade to "market perform" from "outperform" by brokerage Bernstein.

Dialog Semiconductor (Xetra: 927200 - news) fell 6 percent, ASML fell 2.5 percent and ARM fell 3 percent.

French advertisers were also under pressure, with Publicis (Paris: FR0000130577 - news) and JCDecaux (Paris: FR0000077919 - news) down around 4 percent after downgrades by Exane BNP Paribas and Morgan Stanley (Xetra: 885836 - news) respectively.

"JCDecaux shares have shrugged off negative EPS revisions in 2015, rerating to record highs," analysts at Morgan Stanley said in a note.

"The bull case on JCDecaux relies notably on outdoor ad spending gaining share in an ever fragmenting media landscape world. Yet, the share of outdoor has been stable for 10 years and media buyers do not expect it to expand further."

Europe bourses in 2015: http://link.reuters.com/pap87v

Asset performance in 2015: http://link.reuters.com/gap87v

Today's European research round-up

(Editing by Jeremy Gaunt)