* Pan-European FTSEurofirst 300 index falls 1.4 pct
* Brazil-focused stocks down as S&P cuts country rating
* Next advances after reporting rise in profits (Adds closing prices)
By Atul Prakash and Alistair Smout
LONDON, Sept 10 (Reuters) - European shares retreated on Thursday as companies exposed to Brazil came under selling pressure after Standard & Poor's downgraded the country's credit rating to "junk".
French retailer Casino Guichard, which got about half its 2014 revenue from Latin America, fell 6.2 percent. Edenred generates around half its profit from Brazil; it fell 4.8 percent. Supermarket Carrefour, which gets 14 percent of its annual sales from Brazil, fell 3.3 percent.
Other companies that have a significant presence in the country, such as Seadrill, Banco Santander, Anheuser-Busch InBev, British American Tobacco , Galp Energia and Unilever, slid 0.9 to 8 percent.
"Companies which are heavily exposed to Brazil are clearly not good plays as the resource-dependent economy is contracting and the much-needed investments are likely to get pushed back. All these issues make Brazil a less attractive place to do business," Peter Dixon of Commerzbank said.
"If you are exposed to emerging markets, you have to try to find other markets that are doing better."
The FTSEurofirst 300 index of top European shares was down 1.4 percent at 1,415.09 points at the close, losing all of the previous session's gains.
Concern about economic growth in China, the world's biggest metals consumer, hit mining stocks. The STOXX Europe 600 Basic Resources Index fell 2.9 percent, BHP Billiton 5.9 percent and Glencore 7.8 percent. Both were trading without entitlement to their latest dividend payout.
The volatility index VSTOXX, a crude indicator of investor fear, rose 1.6 points.
Chinese manufacturers slashed prices at the fastest rate in six years in August as commodity prices fell and demand cooled. The producer price index retreated 5.9 percent in August from the same period last year, its 42nd straight month of decline.
"Chinese producer prices have been slowing for more than three years, now so another month of declines shouldn't really come as a great surprise. But the market appears to be hyper-sensitive to Chinese economic data at the moment," said Laith Khalaf, senior analyst at Hargreaves Lansdown.
German utility E.ON fell 7.6 percent after saying it would book a significant net loss in 2015.
On the positive side, Next rose 1.3 percent after Britain's second-largest clothing retailer by sales value posted a 7.1 percent rise in first-half profit.
Europe bourses in 2015: link.reuters.com/pap87v
Asset performance in 2015: link.reuters.com/gap87v
Today's European research round-up (Editing by Larry King)