Europe shares erase gains as ECB speculation cools, US data weak
* FTSEurofirst 300 flat, Euro STOXX 50 down 0.1 pct
* Indexes still eye first monthly gain since May
* Tesco warning hits shares of food retailers
* Airlines down after volcano eruption in Iceland
By Francesco Canepa
LONDON, Aug 29 (Reuters) - European shares were poised to end a positive August on a softer note on Friday after euro zone inflation data slightly cooled market speculation about fresh monetary stimulus by the European Central bank.
Euro zone inflation dropped as expected to a fresh five year low in August, data showed on Friday, but it was not likely to force the ECB into immediate policy intervention next week.
Dovish comments by ECB's President Mario Draghi last week had fuelled market bets that the central bank was preparing to pump more into the system, possibly via purchases of government or corporate bonds, a measure known as quantitative easing (QE).
"I think what people realise is that for the ECB to engage in public-sector QE...the ECB has to see the whites of the eyes of deflation," Wouter Sturkenboom, investment strategist at Russell Investments, said. Continuación...