Europe shares set to track steep global losses

LONDON, July 8 (Reuters) - European stocks are set to fall sharply on Tuesday, financial bookmakers said, tracking steep falls in the U.S. and Asia as investors worried that the top two U.S. mortgage providers would have to raise even more capital.

Financial bookmakers, or spreadbetters, in London expected Britain's FTSE 100 .FTSE to fall as much as 2 percent, Germany's DAX .GDAXI down 1.7 percent and France's CAC-40 .FCHI down 1.8 percent.

On Wall Street the Dow Jones industrial average .DJI shed 0.8 percent while Japan's Nikkei .N225 was 2.5 percent lower after shares in mortgage providers Fannie Mae (FNM.N: Quote, Profile, Research) and Freddie Mac (FRE.N: Quote, Profile, Research) dropped sharply.

European shares ended the previous session up 1.3 percent following a recent bout of hefty losses. (Reporting by Rebekah Curtis)