European shares fell early on Monday, surrendering most of the previous session's gains on a downgraded growth outlook for Asia and as investors started to position for a weak earnings season.

Basic resources stocks fell 1.4 percent after the World Bank cut its economic forecasts for the East Asia and Pacific region, saying the slowdown in China - the world's largest consumer of raw materials - could get worse and last longer than expected.

"Everyone is trying to guesstimate if (China) is going to have a hard landing or a soft landing," said Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets in Brussels.

A touch of profit taking was, however, healthy in a market that posted strong gains in the third quarter, he said.

The FTSEurofirst 300 index rose 6.6 percent in the most recent quarter, lifted by expectations central banks would do more to shore up the global economy, but fell nearly 2 percent from mid-September, when it hit a 14-month high.

The index was down 0.9 percent at 0755 GMT, having gained 1 percent on Friday following better than expected U.S. jobs data.

"Synchronised quantitative and synchronised (economic) stalling appear to be offsetting each other fully currently," Standard & Poor's Capital IQ said in a note.

It forecast "little equity upside" for the fourth quarter.

The World Bank downgrade estimate highlighted the extent of the global economic slowdown ahead of the third quarter earnings season, which kicks off in the United States on Tuesday and later this month in Europe.

Companies listed in the U.S. S&P 500 index were expected to show the first decline in earnings in three years, according to Thomson Reuters data.

"We'll have some cautious (corporate) guidance, which normally doesn't help markets," BNP's Gijsels said.

Debt-stricken Europe also faces a bumpy earnings season and Belgian banking group KBC said on Monday it would close its non-core businesses to bring down costs.