European shares hit again by Chinese manufacturing data

* FTSEurofirst 300 drops 2.1 pct

* Basic resources stocks are top sectoral losers

* DAX underperforms despite stronger German data

* Man Group (LSE: EMG.L - news) posts biggest individual decline (Updates prices)

By Alistair Smout

LONDON, Sept 1 (Reuters) - European stocks fell on Tuesday, extending the losses of recent weeks after weak manufacturing data from China again raised concerns over the health of its economy.

The pan-European FTSEurofirst 300 was down 2.1 percent at 1,401.75 points by 1044 GMT, with basic resources stocks down 3.2 percent, making them the top sectoral losers. Asian markets also fell.

Activity in Chinese manufacturing contracted at its fastest pace for three years in August, an official survey showed on Tuesday, reinforcing fears of a sharper slowdown in the world's second largest economy despite a flurry of government support measures.

China's official manufacturing Purchasing Managers' Index (PMI) fell to 49.7 in August, denoting contraction, after recording 50.0 in July.

"The PMI (Other OTC: PMIR - news) was below 50, which is a psychologically important level and puts into real focus the fact that China is contracting," ETX Capital senior sales trader, Joe Rundle, said.

"With the weak data coming out, we're going to see the negative sentiment from the last few weeks continuing," he said.

Investor (Stockholm: INVE-A.ST - news) fears over Chinese growth contributed to a drop in European shares in August, with the FTSEurofirst 300 completing its biggest monthly loss in four years on Monday.

Germany's DAX, which has substantial exposure to China, fell 2.3 percent, underperfoming despite data that showed factory activity at a 16-month high and a jobless rate at a record low.

In aggregate, euro zone manufacturing growth eased last month, with Italian and French factory PMIs falling.

Among individual fallers on the STOXX Europe 600, Man Group dropped 4.2 percent. The hedge fund fell after Bloomberg reported that the boss of its China unit was taken into custody as part of an investigation into recent market volatility.

Bucking the trend, Sweden's Elekta (Stockholm: EKTA-B.ST - news) rose 6.3 percent after reporting first quarter earnings, making it the biggest riser on the STOXX Europe 600. Traders cited an upbeat sales forecast as supporting the health care firm.

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 Keith Weir)