* FTSEurofirst 300 down 0.4 percent, after two days of gains
* Investors await U.S. GDP figures for short-term direction
* Sanofi-Aventis slides on cancer drug setback
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By Atul Prakash
LONDON, Jan 28 (Reuters) - European equities retreated on Friday, pressured by mining shares, with investors staying cautious ahead of U.S. gross domestic product data that is expected to set short-term market direction.
At 0907 GMT, the FTSEurofirst 300 index of top European shares was down 0.3 percent at 1,150.66 points, after gaining in the previous two sessions.
Miners were the top decliners ahead of U.S. GDP figures expected to provide hints about future demand for raw materials. The STOXX Europe 600 Basic Materials index was down 1.4 percent, while Rio Tinto fell 1.2 percent.
"We expect equity markets to move into a consolidation phase in the next couple of months," said Tammo Greetfeld, equity strategist at UniCredit.
"People are waiting for the U.S. GDP figures, but it would only move the market in a big way if the figures significantly deviate from the consensus."
The U.S. GDP report, due at 1330 GMT, is expected to show the economy gathered speed in the fourth quarter, with the biggest gain in consumer spending in four years. Economists forecast a 3.5 percent annualized rate of growth, against a 2.6 percent rate in the final third-quarter estimate.
But analysts said that the growth rate was not strong enough to significantly bring down the unemployment rate in the United States, the world's largest economy. On Wednesday, Federal Reserve officials reiterated a commitment to a $600 billion stimulus effort through the purchase of government bonds.
"When you consider the strength of the U.S. (equity) markets over the last two months having risen a whopping 10 percent since the beginning of December, there comes a point when rising prices have to take a reality check," said Angus Campbell, head of sales at Capital Spreads.
"Our clients are heavily short the indices, in particular the U.S. ones. And when you look at the charts, some technicals indicate we could see a retracement. The FTSE has retraced and failed to recapture its highs so there are some ominous signs that clearly our clients think are a recipe for lower prices."
Across Europe, Britain's FTSE 100 fell 0.6 percent, Germany's DAX dropped 0.1 percent and France's CAC 40 fell 0.3 percent.
ASIAN GROWTH OUTLOOK
Analysts said investors were also worried that any rise in interest rates by Asian central banks could hurt both the region's growth outlook and global equities.
China's efforts to cool its economy could affect demand for commodities in the world's second-largest economy, while European firms that generate a large part of their incomes from Asian markets could also feel the pinch, they said.
Stronger financial stocks, however, limited losses on Friday. The STOXX Europe 600 banking index, up 0.8 percent, gained for a second day, bouncing back from steep losses in the previous sessions. Societe Generale was up 3 percent, while Bankinter rose 2.9 percent.
Among individual movers, French drugmaker Sanofi-Aventis, which is trying to buy U.S. biotech Genzyme, fell 3.9 percent after a setback to a cancer drug seen worth some $800 million as of 2015.