European shares hit two-month low on growth concerns, Ebola spread

* FTSEurofirst 300 index falls 0.8 percent

* Cyclical shares under pressure on growth concerns

* Ebola worries hurt travel and leisure stocks

By Atul Prakash

LONDON, Oct 8 (Reuters) - European equities fell on Wednesday, with a benchmark index slipping to its lowest in nearly two months, as investors moved out of shares around the world in the face of discouraging signals about the global economy.

Growing concern over the spread of Ebola outside Africa also hurt sentiment. Travel and leisure companies suffered because the expected slowdown in air travel and tourism.

The pan-European FTSEurofirst 300 index of blue-chip shares was down 0.8 percent at 1,319.39 points at 1040 GMT after falling as low as 1,317.74, the lowest since August. The decline mirrored overnight losses in Asian and U.S. equities after the IMF cut global growth forecasts.

In the latest evidence of economic malaise, China's services sector growth weakened in September as new business cooled, another sign of a slowdown in the world's second-largest economy. The figures came a day after German industrial output missed forecasts.

"It's concerns over global growth that are weighing on the equity markets," said James Butterfill, global equity strategist at Coutts. "If you look at Europe, there's very weak macroeconomic data. There's weak data coming out of China as well, so it does suggest weaker growth, and markets are perhaps adjusting to that.

Cyclical stocks, sensitive to economic conditions, bore the brunt of the selling, with technology, construction , travel and leisure and automobile falling 1.3 to 2.4 percent.

Travel and leisure stocks also came under pressure from the spread of the Ebola virus to Europe. Several people have been quarantined in Spain after authorities confirmed that a Spanish nurse had caught the disease in Madrid.

Airline stocks such as IAG, which owns British Airways and Iberia, easyJet, Air France-KLM (Other OTC: AFLYY - news) , cruise operator Carnival (LSE: CCL.L - news) , tour operator TUI and Intercontinental Hotels Group, dropped 1.8 to 3.6 percent. French industrial group Bollore (Other OTC: BOIVF - news) , which has a significant exposure to Africa, fell 6.7 percent.

Air France-KLM was also down after saying a pilot strike had wiped more than a fifth off its estimated full-year core profit.

Despite the sell-off in equities that started last week, Allianz Global Investors' Joerg De Vries Hippen said he saw good value in European stocks.

"European stocks are the cheapest you can find, and the only investment where you can realistically expect returns of 5 percent per year given the good dividend yields," said De Vries Hippen, co-chief investment officer of European equities at Allianz GI, which manages 373 billion euros ($472 billion).

"Relative to bonds and other asset classes, equity is the only place to be."

Europe bourses in 2014: http://link.reuters.com/pap87v

Asset performance in 2014: http://link.reuters.com/gap87v

Today's European research round-up (Additional reporting by Blaise Robinson in Paris and Alistair Smout in Edinbutgh; Editing by Larry King)