* FTSEurofirst 300 down 0.2 pct, Euro STOXX 50 down 0.1 pct
* Nexans, Sainsbury drop after warning on sales outlook
* Spanish stocks outperform after strong manufacturing data
By Blaise Robinson
PARIS, Oct 1 (Reuters) - European shares dipped on Wednesday following mixed manufacturing data and as sales warnings from J Sainsbury and Nexans fuelled worries over the outlook for European corporate results.
Data showed German manufacturing activity shrank for the first time in 15 months in September as new orders dried up. Overall, manufacturing growth in the euro zone slowed further in September as new orders contracted for the first time in over a year on dwindling demand at home and from abroad.
At 0810 GMT, the FTSEurofirst 300 index of top European shares was down 0.2 percent at 1,377.44 points.
Spanish stocks outperformed, with Madrid’s IBEX up 0.4 percent, after data showed the country’s manufacturing sector expanded for the 10th straight month in September amid an economic recovery.
Greek banks featured among the top gainers in Europe, with Alpha Bank up 4.6 percent and National Bank of Greece up 4.3 percent, after sources said Greece has won an important concession from the European Central Bank that could help its top four lenders pass the asset quality review.
The weak data, coupled with Tuesday’s figures showing a slowdown in euro zone inflation, will add pressure on the European Central Bank, said Barclays France director Franklin Pichard.
“Once again, the central bank will have to convince investors that it has the firepower to stave off deflation risks. We’ll wait for Thursday’s ECB meeting before buying the market,” he said.
Shares in French cable maker Nexans tumbled 8.6 percent after the firm said full-year revenue would be flat as sales dropped by around 4 percent on an organic basis in the third quarter.
Shares in British retailer J Sainsbury dropped 3.1 percent and hit their lowest level since 2008 after the group cut its full-year sales target and said its strategic review would include future dividend policy.
On the upside, German sportswear maker Adidas rose 3.9 percent after unveiling a plan to buy back up to 1.5 billion euros ($1.89 billion) in shares over the next three years.
Shares in Europe’s biggest online fashion retailer Zalando rose 12 percent in their debut on the Frankfurt exchange on Wednesday.
Around Europe, UK’s FTSE 100 index was down 0.5 percent, Germany’s DAX index flat, and France’s CAC 40 down 0.2 percent. The euro zone’s blue-chip Euro STOXX 50 index was down 0.1 percent.
Indices have been retreating over the past two weeks, dragged by a flurry of sales and profit warnings from European companies as well as by growing concerns over the timing of the U.S. Federal Reserve’s expected interest rate hike next year.
“Since the Fed meeting on Sept. 17, we’ve seen a ‘risk-off’ trade, with the fixed income market playing its role of ‘safe-haven’ while equities and commodities have been slipping in negative territory,” said Gregory Raccah, head of quantitative strategies at YCAP Asset Management, in Paris.
“We’ve seen a rise in volatility across the board, although at this point there’s no risk in the short term to see a big rise in the re-correlation of assets.”
Europe bourses in 2014: link.reuters.com/pap87v
Asset performance in 2014: link.reuters.com/gap87v
Today’s European research round-up
Editing by Alison Williams