(For a live blog on European stocks, type LIVE/ in an Eikon news window)
* STOXX 600 breaks 3-day winning streak
* U.S. manufacturing shrinks for second month in September
* Euro zone manufacturing contracts in September
* AstraZeneca falls U.S. FDA denies approval for treatment
* Britain's Greggs slides on slower sales growth (Adds fresh comment, updates prices to close)
By Susan Mathew
Oct 1 (Reuters) - European shares ended a three-day winning streak on Tuesday as investors were gripped by growth worries after poor U.S. manufacturing data fanned fears of slowing growth in the world's largest economy.
The pan-European STOXX 600 index touched session lows, and closed down 1.3% after data showed U.S. manufacturing contracted for the second month in September, knocking U.S. stocks.
This followed on from euro zone data that showed manufacturing activity contracting at its steepest rate in almost seven years.
Given that economic indicators in the euro zone have been weak recently, the U.S. data is a bigger disappointment for investors because growth in the U.S. economy was expected to rebound, said Hubert de Barochez, a markets economist with Capital Economics.
All major sectors in Europe moved well into the red after the data. German and French stocks lost more than 1% each.
Losses in London's FTSE 100 were limited by a drop in the pound ahead of UK Prime Minister Boris Johnson's presentation of proposals for an amended Brexit agreement. A weakness in the sterling tends to bode well for exporters in the index.
Adding to the gloomy mood, stocks with exposure to Hong Kong and Asia, such as Standard Chartered, HSBC, Louis Vuitton owner LVMH lost between 0.8% and 2.5%.
These stocks have been under pressure since early summer as pro-democracy protests have stretched into four months. But they lost ground on Tuesday after reports that a protestor in Hong Kong was hit by a police bullet.
Healthcare stocks also slid, with shares of AstraZeneca down 1.7% after the U.S. Food and Drug Administration denied approval to the smoker's lung treatment developed by the drugmaker.
British baker Greggs slid 12.5% to the bottom of the STOXX 600 after it reported slower quarterly sales growth and warned of rising cost pressures.
Airlines were bright a spot with Ryanair, International Consolidated Airlines and Air France-KLM rallying after Bank of America Merrill Lynch reinstated a "buy" rating on the stocks and gave a positive outlook for the sector.
These gains plus comments from U.S. trade adviser Peter Navarro, who dismissed reports the White House could seek to force Chinese companies to delist from U.S. exchanges, had helped the pan-region index touch a two-month high in early trade, before it turned to losses.
The STOXX 600 gained around 2% in the third-quarter compared to 12% in the first three months of this year, as the U.S.-China trade war worsened economic prospects and slowed a global stocks rally that dates back almost a decade.
Reporting by Shreyashi, Sruthi Shankar and Susan Mathew in Bengaluru; Editing by Bernard Orr and Patrick Graham