European shares held back by cement makers as FX hits results

* FTSEurofirst 300 flat; Portugal's PSI down 2.1 pct

* Cement makers lead declines as forex hits results

* Total (NYSE: TOT - news) 's stock hit by worries over Russia investment

By Francesco Canepa

LONDON, July 30 (Reuters) - Cement makers lagged European equity indexes on Wednesday, after Switzerland's Holcim and Germany's HeidelbergCement (Other OTC: HDELY - news) reported disappointing results that they blamed on weak emerging-market currencies.

Their shares fell 4.7 percent and 2.9 percent, respectively, leaving the STOXX Europe 600 down 1 percent. The sector was the worst performer in Europe.

French electrical-gear maker Schneider Electric, down 2 percent, also blamed the depreciation of several currencies against the euro for disappointing sales growth in the first half of the year.

Companies in the STOXX Europe 600 that have reported quarterly results so far have seen their sales drop by an average 1 percent, StarMine data showed.

While stronger currencies in developed Europe played a role in the decline, some strategists were starting to worry about weaker demand in Europe, which is struggling with low growth and inflation.

"It's not so much about the currency, there's no demand from end-customers in Europe," said Claudia Panseri, global equity strategist at Societe Generale (Paris: FR0000130809 - news) . "With prices also falling, I see no growth."

Bucking the trend was French car maker Peugeot (Paris: FR0000121501 - news) , which surged 6.7 percent after it posted the first positive contribution from its core auto division in three years in the first six months of 2014.

Dutch telecoms group KPN (Amsterdam: KPN.AS - news) rose 6 percent after reporting a better-than-expected second-quarter core profit, although it was helped in part by cost cuts.

By 1334 GMT, the FTSEurofirst 300 index of top European shares was flat at 1,373.34 points. It had briefly edged high after the publication of better-than-expected U.S. GDP data.

French oil major Total fell 2.6 percent after saying that it had stopped buying shares in Russia's Novatek the day of the downing of a Malaysia Airlines flight over Ukraine.

Portugal's PSI 20 fell 2.1 percent, underperforming all major European indexes, as retailer Jeronimo Martins and Banco Espirito Santo each fell nearly 10 percent. Jeronimo Martins is struggling with deflation in its two main markets, Poland and Portugal, and BES fell amid concern it will report a loss later on Wednesday and will require a capital increase.

U.S. GDP FAILS TO COMFORT INVESTORS

European investors failed to benefit from data showing U.S. economic growth accelerated more than expected in the second quarter, partly due to inventories.

The GDP report was released hours before Federal Reserve officials conclude a two-day policy meeting. It could fuel debate on whether the central bank needs to raise interest rates sooner than expected, a move that would affect borrowing costs globally.

"The Federal Reserve was expecting a rebound, and I don't think they are going to be too heavily swayed by these changes," John Clarke, chief investment officer at GHC Capital Markets, said. "My concerns about European equities is that investors are discounting too much in terms of European economic recovery."

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 Larry King)