European shares edge lower, focus on U.S. data

* FTSEurofirst 300 down 0.2 pct after strong gains on Wed

* Investors await U.S. economic data

* For up-to-the minute market news, click on [STXNEWS/EU]

By Atul Prakash

LONDON, Sept 2 (Reuters) - European equities edged lower on Thursday after the previous session's jump, though auto shares were buoyed by sales data in a market mostly holding its fire ahead of more U.S. economic data due later in the day.

By 1155 GMT, the FTSEurofirst 300 <.FTEU3> index of top European shares was down 0.2 percent at 1,054.10 points after surging 2.9 percent on Wednesday, their biggest gain since May, on upbeat manufacturing data from China and the United States.

The market showed little reaction to Thursday's decision by the European Central Bank to keep interest rates on hold at a record low, as expected, amid tepid economic recovery and persistent concerns about the banking sector. [ID:nLDE68114V]

Analysts expect the euro zone central bank to extend its liquidity safety net to banks, offering unlimited funding until early next year at fixed interest rates.

ECB President Jean-Claude Trichet will announce the decision on liquidity supplies at a news conference starting at 1230 GMT, when he will also reveal new staff economic forecasts.

Tammo Greetfeld, equity strategist at UniCredit, said an extension of the ECB's liquidity support into the first quarter of 2011 would be a "double-edged sword".

"On the one hand, we know that life for banks in the euro zone will be easier until the date the ECB announces, but on the other hand it also signals that the interbank money market does not function properly enough despite the publication of the bank stress test results.

"My opinion is that this negative aspect would be a dominant factor," Greetfeld said.

UTILITIES FALL

Utilities shares were among the top decliners on the index, with Centrica <CNA.L>, E.ON <EONGn.DE> and Energias de Portugal <EDP.LS> falling 0.1 to 1.8 percent.

But losses were limited by stronger carmakers, with the STOXX Europe 600 Automobiles & Parts index <.SXAP> rising 1 percent. Daimler <DAIGn.DE> gained 1.9 percent after saying late on Wednesday that U.S. sales of Mercedes Benz and Smart brand vehicles rose 7.4 percent in August.

Porsche <PSHG_p.DE> gained 1.2 percent after reporting that sales of its cars surged 33 percent in the United States during the month. BMW <BMWG.DE>, Volkswagen AG <VOWG.DE> and Renault <RENA.PA> were up 0.8 percent to 1.3 percent.

Investors are waiting for more U.S. data later in the session, including weekly jobless numbers and pending home sales, to give further indications on the strength of the recovery in the world's biggest economy. (Editing by Will Waterman)