* FTSEurofirst 300 down 0.4 percent, after two days of gains
* Investors await U.S. GDP figures for short-term direction
* Sanofi-Aventis slides on cancer drug setback
* For up-to-the-minute market news, click on []
By Atul Prakash
LONDON, Jan 28 (Reuters) - European equities retreated on
Friday, pressured by mining shares, with investors staying
cautious ahead of U.S. gross domestic product data that is
expected to set short-term market direction.
At 0907 GMT, the FTSEurofirst 300 <> index of top
European shares was down 0.3 percent at 1,150.66 points, after
gaining in the previous two sessions.
Miners were the top decliners ahead of U.S. GDP figures
expected to provide hints about future demand for raw materials.
The STOXX Europe 600 Basic Materials index <.SXPP> was down 1.4
percent, while Rio Tinto <RIO.L> fell 1.2 percent.
"We expect equity markets to move into a consolidation phase
in the next couple of months," said Tammo Greetfeld, equity
strategist at UniCredit.
"People are waiting for the U.S. GDP figures, but it would
only move the market in a big way if the figures significantly
deviate from the consensus."
The U.S. GDP report, due at 1330 GMT, is expected to show
the economy gathered speed in the fourth quarter, with the
biggest gain in consumer spending in four years. Economists
forecast a 3.5 percent annualized rate of growth, against a 2.6
percent rate in the final third-quarter estimate.
But analysts said that the growth rate was not strong enough
to significantly bring down the unemployment rate in the United
States, the world's largest economy. On Wednesday, Federal
Reserve officials reiterated a commitment to a $600 billion
stimulus effort through the purchase of government bonds.
"When you consider the strength of the U.S. (equity) markets
over the last two months having risen a whopping 10 percent
since the beginning of December, there comes a point when rising
prices have to take a reality check," said Angus Campbell, head
of sales at Capital Spreads.
"Our clients are heavily short the indices, in particular
the U.S. ones. And when you look at the charts, some technicals
indicate we could see a retracement. The FTSE has retraced and
failed to recapture its highs so there are some ominous signs
that clearly our clients think are a recipe for lower prices."
Across Europe, Britain's FTSE 100 <> fell 0.6 percent,
Germany's DAX <> dropped 0.1 percent and France's CAC 40
<> fell 0.3 percent.
ASIAN GROWTH OUTLOOK
Analysts said investors were also worried that any rise in
interest rates by Asian central banks could hurt both the
region's growth outlook and global equities.
China's efforts to cool its economy could affect demand for
commodities in the world's second-largest economy, while
European firms that generate a large part of their incomes from
Asian markets could also feel the pinch, they said.
Stronger financial stocks, however, limited losses on
Friday. The STOXX Europe 600 banking index <.SX7P>, up 0.8
percent, gained for a second day, bouncing back from steep
losses in the previous sessions. Societe Generale <SOGN.PA> was
up 3 percent, while Bankinter <BKT.MC> rose 2.9 percent.
Among individual movers, French drugmaker Sanofi-Aventis
<SASY.PA>, which is trying to buy U.S. biotech Genzyme <GENZ.O>,
fell 3.9 percent after a setback to a cancer drug seen worth
some $800 million as of 2015. []
