* FTSE falls 1.3 percent as global recovery worries mount
* Corporate results disappoint, CRH warns on U.S.
* Miners, energy firms down with commodities, outlook
By David Brett
LONDON, Aug 24 (Reuters) - Britain's leading share index fell sharply early on Tuesday, with a bearish mood over the health of the global economic recovery more than offsetting bullish sentiment from recent mergers and acquisitions activity.
By 0808 GMT, the FTSE 100 was down 68.13 points, or 1.3 percent, at 5,166.71, having gained 0.8 percent at 5,234.84 on Monday, albeit in light volumes.
London's blue chips echoed falls overnight on Wall Street, while the Japan's Nikkei hit a 15-month closing low as worries over the sustainability of the economic recovery returned to haunt markets.
Irish building supplies giant CRH warned core earnings would fall 10 percent this year, pointing to mounting concerns over the economy in the United States.
In the UK, the world's largest builders merchant distributor, Wolseley, which has substantial exposure to the United States, was one of the top FTSE 100 fallers, down 3.3 percent.
"Corporate news has been disappointing today. CRH's results had a negative read across for the sector and also ancillary companies," Jeremy Batstone Carr, head of research at Charles Stanley said.
WPP, the world's largest ad firm by sales, which also has heavy exposure to the United States, fell 2.7 percent even though it lifted its outlook for the year after posting a 3.1 percent rise in key organic revenue.
Investors will closely watch U.S. Existing Home Sales for July and the U.S. Richmond Federal Manufacturing survey for August, both due at 1400 GMT, for further signs as to the health of the world's biggest economy.
COMMODITY RETREAT
Mining and energy shares fell along with commodity prices as demand concerns clouded the outlook.
India-focused mining group Vedanta Resources shed 5.3 percent after India's environment ministry rejected a plan by Vedanta to mine bauxite in an eastern state, saying it violated forest laws.
Vedanta is already facing regulatory hurdles in its bid for control of Cairn India, a potential deal valued at $9.6 billion that could give the group a slice of India's oil reserves.
However, India's state-run Oil and Natural Gas Corp, should have the last word in Vedanta Resources' proposed acquisition of Cairn India, Trade Minister Anand Sharma said.
Cairn Energy fell 2.0 percent after the oil explorer struck gas in Greenland, which disappointed investors who had hoped for an oil find, and said the sands were not of a type that usually yields commercial quantities.
Elsewhere in the sector, Chilean miner Antofagasta shed 3.2 percent after it trimmed its annual production target, even though posting a near doubling in first-half earnings per share.
Global miner Rio Tinto, meanwhile, fell 3.1 percent after a Canadian newspaper linked it and a Chinese partner with a bid for Potash Corp, which is fending off a $39 billion hostile bid from BHP Billiton. Rio Tinto declined to comment.
Staying with both heavyweight miners, South Africa's National Union of Mineworkers said its members at a Rio Tinto-BHP Billiton joint venture would vote on a strike on Tuesday over wage demands. BHP Billiton dropped 1.6 percent.
Coal and base metals miner Xstrata also fell sharply, dropping 3.0 percent after it announced a $381 million agreed takeover of Australian-listed Sphere Minerals, which controls magnetite iron ore deposits in Mauritania.
Banks were the sharpest fallers with HSBC, which is in talks with Old Mutual over the purchase of a controlling stake in South Africa's fourth-largest bank, Nedbank, down 0.9 percent.
Global mergers and acquisitions have hit nearly $200 billion so far in August, $77 billion shy of the record set in 1999 for what is typically one of the quietest months of the year, Thomson Reuters data showed.
"You have to question why advisors are encouraging firms to pursue M&A activity at this time ... My sense is shareholders would be better served by money being returned to them," Charles Stanley's Batstone-Carr said. (Graphics by Scott Barber; Editing by Simon Jessop)