* FTSEurofirst 300 down 0.4 pct, trims Friday's gains
* Italy's credit downgrade weighs on sentiment
* Energy shares drop again as Brent slips below $69 (Updates with new prices)
By Alistair Smout and Sam Wilkin
LONDON, Dec 8 (Reuters) - European shares fell on Monday, trimming some of the previous session's sharp gains after Italy's sovereign debt rating was cut late on Friday and following soft economic data from China and Japan.
S&P downgraded Italy to BBB-, just one notch above junk, from BBB, citing weak growth and poor competitiveness that undermine the sustainability of its huge public debt.
"The Italian downgrade is a reminder that the European sovereign debt crisis has not vanished overnight," said Henk Potts, director of global research at Barclays.
"Sentiment is still a bit fragile in the short term, investors need to be looking at a medium- to long-term time horizon in Europe."
Expectations that the European Central Bank will start a bond-buying programme next year helped to limit losses, with the FTSE MIB just 0.2 percent lower.
"The rating is now one level above junk, but it makes it even more of a certainty that the ECB will do something," said Ioan Smith, director of KCG Europe.
At 1500 GMT the FTSEurofirst 300 index of top European shares was down 0.4 percent at 1,399.57 points, having surged 1.8 percent on Friday after much better than expected U.S. monthly jobs data.
Data from elsewhere was less encouraging. China's exports rose 4.7 percent in November from a year earlier, while imports dropped 6.7 percent, well below expectations and adding to concerns that the world's second-largest economy could be facing a sharper slowdown.
Japan's economy shrank more than initially reported in the third quarter on declines in business investment.
Energy shares fell again as Brent dropped almost $2 a barrel after Morgan Stanley cut its forecast for crude and the market received little support from China's trade data.
ENI was down 3 percent, Royal Dutch Shell slipped by 2 percent and BP fell 1.9 percent.
The STOXX oil and gas index has tumbled about 23 percent since June, wiping roughly $240 billion off market capitalisation, more than the entire market value of Shell, Europe's biggest oil major, Thomson Reuters data shows.
Europe bourses in 2014: link.reuters.com/pap87v
Asset performance in 2014: link.reuters.com/gap87v
Today's European research round-up (Editing by Jon Boyle)