* FTSEurofirst 300 falls 0.6 pct after 1-week high on Tue
* Investors wait for Portuguese auction, U.S. economic data
* For up-to-the-minute market news, click on []
By Atul Prakash
LONDON, Jan 5 (Reuters) - European shares retreated on
Wednesday from their highest in more than a week, with investors
trading cautiously ahead of Portuguese treasury bill auctions
and U.S. private sector employment and non-manufacturing data.
At 0948 GMT, the FTSEurofirst 300 <> index of top
European shares was down 0.6 percent at 1,134.79 points after
falling to a low of 1,131.70 earlier in the session. It rose 0.9
percent to its highest closing in more than a week on Tuesday.
Chemical shares featured among the top decliners, with the
European sector index <.SX4P> slipping 1.6 percent on concerns
about a slowdown in world demand. Global chemicals market leader
BASF <BASFn.DE> fell 3.5 percent.
Investors kept an eye on Portugal, which will pay almost
twice as much to sell six-month paper on Wednesday as it did in
September, keeping the country at the sharp end of persistent
market concerns about euro zone debt. []
The market has been fretting about Portugal's public
finances, the sustainability of its large debt burden and
prospects of the Iberian country becoming the next euro zone
member to seek a bailout after Ireland and Greece.
"This is a serious test for the market. People are cautious
to see how the Portuguese auctions go," said Philippe Gijsels,
head of research at BNP Paribas Fortis Global Markets.
"What we see today in the market is a reality check of the
fact that there are still quite a bit of worries around. We
still have big questions about the U.S. economy."
Macroeconomic data also dampened sentiment. Figures showed
that growth in the euro zone services sector slowed in December
as activity in Ireland and Spain shrank.
The Markit Eurozone Services Purchasing Managers' Index
(PMI), which measures the activities of thousands of businesses
ranging from banks to restaurants, fell in December to 54.2 from
55.4 in November. []
MINERS TRACK METALS
Miners came under pressure from lower metals prices, with
copper prices falling on Wednesday from record highs in the
previous session after a flurry of risk aversion sent
commodities to their lowest in nearly two months.
The STOXX Europe 600 Basic Materials index <.SXPP> fell 1.1
percent, while BHP Billiton <BLT.L> and Anglo American <AAL.L>
were down 2 percent and 1.9 percent respectively.
"Cautious optimism is probably where we are for the time
being. There might just be an element of nerves creeping back
into the market as investors return to their desks," said Keith
Bowman, equity analyst at Hargreaves Lansdown.
"We are likely to remain very data sensitive."
Investors waited for U.S. ISM non-manufacturing data, due at
1500 GMT, the ADP National employment survey at 1230 GMT and the
Challenger Layoffs numbers for December at 1315 GMT to get some
hints about Friday's crucial U.S. December jobs report.
Among individual movers, Associated British Foods <ABF.L>
fell 1.6 percent as Investec Securities cut its rating for the
food producer to "hold" from "buy" on valuation grounds.
Agrochemicals group Syngenta <SYNN.VX> rose 1.5 percent
after better-than-expected results from U.S. rival Mosaic
<MOS.N>. []
Across Europe, Britain's FTSE 100 <>, Germany's DAX
<> and France's CAC 40 <> fell 0.3 to 1.2 percent.
Portugal's PSI 20 <> was down 0.7 percent.
(Editing by Sharon Lindores)
