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* ECB keeps rates on hold
* Voestalpine and Johnson Matthey rise after results
* Spanish banks buoyed by HSBC comments (ADVISORY- Reuters plans to replace intra-day European and UKstock market reports with a Live Markets blog on Eikon - see cpurl://apps.cp./cms/?pageId=livemarkets for site in development. See the bottom of the report for moredetails)
By Alistair Smout
LONDON, June 2 (Reuters) - European shares edged intonegative territory on Thursday after OPEC failed to agree anoutput ceiling for oil and the European Central Bank revised itsinflation and growth forecasts only slightly higher.
The pan-European STOXX 600 and FTSEurofirst 300 indexes were both down 0.3 percent by 1327 GMT, havingfallen around 1 percent in the previous session.
Oil and gas shares were the top sectoral fallers,down 1 percent after an OPEC delegate told Reuters that OPEC wasnot changing its ouptut policy, meaning the organisation hadfailed to agree a new production ceiling.
The prospect of lower oil prices complicates the task ofcentral banks as they attempt to battle deflation.
The ECB kept interest rates firmly on hold, as expected.
The ECB raised growth and inflation forecasts for the eurozone only modestly, by less than some had hoped.
President Mario Draghi said the ECB had lifted growthforecasts for 2016 but cut growth estimates for 2018, and raisedits inflation forecast to just 0.2 percent from 0.1 for thisyear.
"He said that inflation was not going to pick up thatstrongly, despite oil prices being reasonably high," said JoeRundle, head of trading at ETX Capital.
"With what's happened out at OPEC, that will producedownward pressure on oil, which could produce deflation in theeuro zone."
Providing support to the market, Voestalpine rosemore than 5 percent.
The Austrian steel producer posted a full-year net profitabove expectations, helped by its focus on better-quality steeland products which make it less vulnerable to price swings andcompetition from commodity steel imports.
A welcome set of results also underpinned shares in JohnsonMatthey, which rose around 4 percent.
The British maker of metal catalysts for caremission-control devices also forecast higher results in thecoming year due to restructuring and improved market conditions.
Banco Popular led Spanish banks higher with a 4.2percent rise, supported by encouraging comments from HSBC on thesector.
"Combined with cost containment and improving asset quality,Spanish banks should continue to post growth in net profit. Concerns on the impact from lower rates look overdone and banksshould continue to grow profits," analysts at HSBC said in anote.
Today's European research round-up
ADVISORY- Reuters plans to replace intra-day European and UKstock market reports with a Live Markets blog on Eikon (see cpurl://apps.cp./cms/?pageId=livemarkets for site in development). In a real-time, multimedia formatfrom 0600 London time through the 1630 closing bell, it willinclude the best of our market reporting, Stocks Buzz service,Eikon graphics, Reuters pictures, eye-catching research andmarket zeitgeist. Breaking news and dramatic market moves willcontinue to be alerted to all clients and we will continue toprovide a short opening story and comprehensive closing reports.
If you have any thoughts, suggestions or feedback on this,please email mike.dolan@thomsonreuters.com.
Mike Dolan, Markets Editor EMEA (Additional reporting by Danilo Masoni; editing by AndrewRoche)
