European shares dip early as China data weighs

* FTSEurofirst 300 down 0.4 pct, Euro STOXX 50 down 0.3 pct

* China's lower-than-expected PMI weighs on sentiment

* Bayer (Milan: BAY.MI - news) sags after UK healthcare agency decision

By Blaise Robinson

PARIS, March 24 (Reuters) - European stocks slipped in early trade on Monday, trimming last week's lofty gains, as data showing China's manufacturing activity contracted in the first quarter of 2014 revived worries over the outlook for global growth.

Losses were limited by robust data from Germany and figures showing a recovery in French manufacturing, which fuelled expectations of a long-awaited rebound in corporate profits in Europe this year.

But Bayer fell by more than 2 percent, impacting rival companies such as GlaxoSmithKline (Other OTC: GLAXF - news) , after the drugmaker was dealt a blow by Britain's healthcare cost agency.

At 0852 GMT, the FTSEurofirst 300 index of top European shares was down 0.4 percent at 1,302.71 points, after gaining 1.8 percent last week.

China's flash Markit/HSBC Purchasing Managers' Index (PMI) fell to an eight-month low of 48.1 in March, a weaker-than-expected figure. The index has been below the 50 level since January, indicating a contraction in the sector this year.

"As the data shows this morning, China's slowdown is sharper than what most people had expected, which fuels worries about the impact on global growth," said Philippe de Vandiere, analyst at Altedia Investment Consulting in Paris.

"But Chinese authorities have plenty of tools to avoid a hard landing, and we know that the country's transition to an economic model more focused on consumer spending will lower its growth rate a bit, so no big concern here."

Industrial stocks lost ground, with Siemens down 1.1 percent and Schneider Electric (EUREX: DE000A1L1844.EX - news) down 0.8 percent.

The Chinese data was partly offset by figures showing French business activity grew in March at the fastest pace in more than 2-1/2 years, beating forecasts for a further contraction.

Markit's composite PMI jumped in March to 51.6 from 47.9 in the previous month. Having lagged the recovery in much of the euro zone in recent months, the index for France surged through the key 50-point threshold dividing contraction from expansion to reach its highest level since August 2011.

Germany's private sector also grew in March, although at a slower rate than in the previous month as both manufacturing and services industry activity expanded less than expected. The country's PMI eased to 55.0 in March from February's 56.4, which was the highest in more than 2-1/2 years.

Around Europe, Britain's FTSE 100 index was down 0.1 percent, Germany's DAX index down 0.3 percent, and France's CAC 40 down 0.4 percent. The euro zone's blue-chip Euro STOXX 50 index was down 0.3 percent at 3,087.22 points.

Shares in Bayer were among the biggest European blue-chip losers after Britain's National Institute for Health and Care Excellence recommended the state health service not use the firm's new prostate cancer drug Xofigo.

Shares in other drugmakers also fell, with GlaxoSmithKline (Frankfurt: GS7.F - news) down 0.6 percent, Roche down 1.3 percent and Sanofi (NasdaqGM: GCVRZ - news) down 1 percent.

"I am 'underweight' on the healthcare sector. I don't see much growth and there is too much competition," says Clairinvest fund manager Ion-Marc Valahu.

Bucking the trend, shares in Deutsche Post (Other OTC: DPSGY - news) rose 3.5 percent in early trade after a report said Chief Executive Frank Appel would unveil a new profit target of up to 1.6 billion euros ($2.21 billion) for the group's mail business.

Overall, investors' appetite for stocks was also dented by tensions simmering between the West and Russia.

NATO's top military commander said on Sunday Russia had built up a "very sizeable" force on its border with Ukraine, and that Moscow may have a region in another ex-Soviet republic, Moldova, in its sights after annexing Crimea from Ukraine.

Europe bourses in 2014: http://link.reuters.com/pad95v

Asset performance in 2014: http://link.reuters.com/rav46v

Today's European research round-up (Additional reporting by Sudip Kar-Gupta in London; Editing by Catherine Evans)