European shares head for worst month in four years

LONDON, Aug 31 (Reuters) - European shares fell on Monday, with Germany's DAX and France's CAC on track for their worst month in four years, plagued by sliding Chinese stocks and the threat of a U.S (Other OTC: UBGXF - news) . rate increase as early as September.

At 0706 GMT, the DAX, the CAC and the euro zone's Euro STOXX 50 were down 0.5 to 0.6 percent. Volumes were likely to be thin with UK markets closed for a public holiday.

The Euro STOXX 50, the DAX and the CAC, all down about 9 percent in August so far, were set to record their worst monthly performance in percentage terms in four years.

The Fed left open on Friday the possibility of a September interest rate increase, although several officials at the U.S. central bank acknowledged that prolonged turmoil in financial markets might delay the first policy tightening in nearly a decade.

Shanghai stocks, which have plunged more than 40 percent since mid-June, were down about 1 percent, while MSCI (NYSE: MSCI - news) 's broadest index of Asia-Pacific shares outside Japan shed 0.4 percent and was on track for a fall of about 10 percent this month. (Reporting by Atul Prakash, editing by Larry King)