* FTSEurofirst 300 index slips from 3-week high
* Cyclical shares among top decliners
* Morrisons rises after Amazon distribution deal
* Miners up, Fiat leads positive auto sector (Adds details, updates prices)
By Atul Prakash
LONDON, Feb 29 (Reuters) - European shares retreated from a three-week high on Monday and were on track for their third straight month of losses after a weekend meeting of the G20 group of leading economies failed to agree new measures to boost growth.
British grocer Morrisons bucked the wider trend, surging as much as 6.9 percent after a striking a distribution deal with online retailer Amazon.
"Investors are disappointed that the G20 leaders fell short of coming up with new supporting measures despite once again repeating their concerns about the global economy and financial markets," said Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets in Brussels.
The Group of 20 finance ministers and central bankers said they needed to look beyond ultra-low interest rates to revive the global economy, flagging risks to growth including volatile capital flows and sinking commodity prices.
The pan-European FTSEurofirst 300 index was down 0.8 percent by 1056 GMT, coming off earlier lows after China reduced the amount of cash that banks must hold as reserves as it seeks to revive a slowing economy.
Cyclical sectors, which generally suffer when economic growth slows, came under pressure. The European banking index fell 1.5 percent, the financial services sector dropped 1.8 percent and insurers dropped 1.2 percent.
Britain's FTSE 100 index fell 0.7 percent, Germany's DAX dropped 1.7 percent and France's CAC 40 was down 0.8 percent. Ireland's benchmark equity index fell about 0.5 percent, taking this year's losses to around 10 percent, after early results pointed to an inconclusive outcome to parliamentary elections.
Morrisons was last up 4.6 percent following its deal with Amazon.
The British supermarket sector has been convulsed by fierce competition in recent years and analysts have said a step-up from Amazon could hurt the traditional players even more.
"The tie-up with Amazon is also consistent with Morrisons' plans to drive volume, broaden its brand reach and leverage its marginal costs," Shore Capital said in a note.
"Operational improvement should lead to free cash generation that shareholders can expect in time to receive."
Miners were the top sectoral gainer, up 2 percent, while autos edged up led by a rise of more than 3 percent in Fiat Chrysler on speculation about a potential tie-up with Peugeot. (Additional reporing by Danilo Masoni in Milan; editing by Jon Boyle)