(Refiles to change headline)
* FTSEurofirst 300 down 0.9 pct, Greece's ATG down 1.5 pct
* Mixed signals from Greek negotiations unnerve investors
* Associated British Foods gains on rating hike
By Liisa Tuhkanen
LONDON, May 29 (Reuters) - European shares fell on Friday, setting them on course for a weekly loss, as investors were unnerved by conflicting signals from Greece's debt talks and data showing private loan growth in the euro zone stalled last month.
Athens' benchmark share index fell 1.5 percent while the pan-European FTSEurofirst 300 shed 0.9 percent to 1,601.33 points by 1407 GMT.
The FTSEurofirst is down 1 percent so far in a week that has been marked by uncertainty surrounding Greece's negotiations with its international lenders ahead of a payment deadline for Athens looming next week.
Greece's government intends to reach an agreement on a cash-for-reforms deal by Sunday, its spokesman said on Thursday, even as euro zone officials suggested a deal was far from imminent.
The lack of clarity on the outcome meant some traders were reluctant to make strong bets on future market directions.
"It's just Greece, Greece and Greece," David Madden, a market analyst at IG, said. "The lack of news in either direction tells you why traders are sitting on their hands."
European indexes extended losses after data showed euro zone private sector loans stopped rising in April.
"The lending data shows a lack of risk attitude among businesses," said Brenda Kelly, head analyst at London Capital Group.
Despite the losses suffered this week, the pan-European index is still up around 1.7 percent for the month, with some investors seeing grounds for optimism.
"We are overweight euro zone equities. What we like is that the economic cycle is kicking in," said Mads Pedersen, head of global asset allocation at UBS Wealth Management in Zurich.
"We have had lots of stimulus, and we think in the next 6-12 months earnings growth will kick in stronger."
Associated British Foods was among the biggest gainers of the day, adding 2.7 percent to reach two-month highs after Goldman Sachs ramped up its rating to "buy" from "sell".
Mergers & acquisition speculation boosted Swiss agrochemicals company Syngenta, which was building up defenses for a possible higher bid from U.S. peer Monsanto , according to a Bloomberg report. Syngenta shares were up 1.1 percent.
Swedish builder Skanska rose 0.9 percent after it said its LaGuardia Gateway Partners consortium had been selected as preferred bidder in a $3.6 billion project to build a new terminal at New York's LaGuardia Airport.
Europe bourses in 2015: link.reuters.com/pap87v
Asset performance in 2015: link.reuters.com/gap87v
Today's European research round-up
Additional reporting by Francesco Canepa; Editing by Jeremy Gaunt