* Shares off lows after China cuts banks’ reserve requirement
* Morrisons rises after Amazon distribution deal
* Miners up, Fiat leads positive auto sector
* Germany’s DAX dragged lower by BASF, utilities (Updates with latest moves)
By Danilo Masoni and Atul Prakash
MILAN/LONDON, Feb 29 (Reuters) - European shares fell on Monday but were off earlier lows as a decision by China to resume its easing cycle partly offset disappointment over the G20 meeting failing to agree new measures to boost growth.
The pan-European FTSEurofirst 300 index was down 0.3 percent by 1448 GMT. The index reached a three-week high last week but was still on track for its third straight month of losses due to investor concerns over the global growh outlook.
Fresh euro zone data showed inflation unexpectedly turned negative in February, helping the market come off lows and adding weight to expectations the ECB will further boost stimulus measdures at its meeting next month.
Sentiment however was fragile due to worries over growth.
“Ongoing investor worries about deflation and other economic risks mean the potential gains for the markets may be limited unless we see a marked improvement in global data,” said Gain Capital analyst Fawad Razaqzada.
China’s cental bank cut on Monday the reserve requirement ratio, or the amount of cash that banks must hold as reserves, by 50 basis points, to help revive a slowing economy.
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 G20 conclusions confirm that policymakers still have not felt enough the pressure from markets,” said Didier Saint-Georges, Managing Director at Carmignac.
Miners were the top sectoral gainer, up 2.3 percent, while autos were also higher, up 1.4 percent, helped by by a rise of more than 3 percent in Fiat Chrysler on speculation about a potential tie-up with Peugeot.
British supermarket group Morrisons surged 5.3 percent, bucking the weaker trend in its sector, after a striking a distribution deal with online retailer 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.”
Elsewhere in the sector, Tesco was down 2.8 percent, Carrefour fell 0.5 percent and Ahold was down 0.2 percent.
Germany’s DAX fell 0.9 percent, dragged down by BASF after Credit Suisse and Kepler cut their price targets on the chemicals company.
German utilities E.ON and RWE both fell more than 2 percent with traders citing longer than expected talks over how to share the costs of the country’s exit from nuclear power.
Ireland’s benchmark equity index rose 0.6 percent. Two of the county’s biggest parties said they would each try to form their own government over the next 10 days following an inconclusive election. (Editing by Jon Boyle and Keith Weir)