European shares dip on U.S., Greek worries

People are reflected on an electronic board displaying a graph showing the movement of Nikkei share average outside a brokerage in Tokyo November 7, 2012.

LONDON (Reuters) - Shares, commodities and the euro fell in early European trading on Wednesday as investors fretted about Greece's new debt deal and a lack of progress in U.S. budget talks.

European shares on the FTSEurofirst300 opened down almost 0.4 percent, giving up the previous session's 0.3 percent gain.

London's FTSE 100 Paris's CAC-40 and Frankfurt's DAX were all down roughly 0.4 percent and the MSCI index of global stocks was down just over 0.2 percent following falls in Asian equity markets.

Lenders agreed to cut Greece's debt on Tuesday, averting an imminent bankruptcy, but some details of the deal are unclear and analysts worry it did not do enough to ensure the debt is sustainable.

"The uncertainty brought by this approach makes European assets, including the euro, vulnerable to global growth risks. For that reason, we think the European muddle through amplifies the market's response to the fiscal cliff discussion in the US," Barclays Capital analysts said in a note.

The U.S. Congress needs to reach a compromise to avoid $600 billion in tax increases and spending cuts due to start in January, a combination known as the fiscal cliff that could hurt the world's largest economy.

U.S. Senate Majority Leader Harry Reid expressed disappointment on Tuesday over slow progress in finding a solution.

The euro was down 0.1 percent at $1.2930 at 0840 GMT. The yen jumped as the dollar dropped about 0.4 percent to 81.81 yen, moving away from a 7-1/2 month high of 82.84 yen reached last Thursday.

Gold fell for a third day and in bond markets German government bonds firmed as the U.S. fiscal problems provided support for safe haven fixed-income assets.

In Asia, MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.5 percent, retreating from Tuesday's nearly three-week highs, with materials and energy sectors leading the declines.

U.S. futures prices pointed to a soft Wall Street open after the Dow, the S&P 500 and Nasdaq all closed down on Tuesday after worries over U.S. budget talks overshadowed positive economic data.

(Editing by Anna Willard)