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Sept 20 (Reuters) -

European shares slipped on Friday after a rally in the

previous session spurred by U.S. Federal Reserve's outsized

interest rate cut, while shares of Mercedes were set for their

worst day in 15 months after the company cut its core profit

outlook.

The pan-European STOXX 600 index fell 0.4% to

519.52 points as of 0710 GMT, but was on track for a second

straight week of gains.

All major European markets were trading lower, except

Spain's that edged up 0.1%.

Automobile shares led sectoral losses with an over

3% fall, hurt by a 7.6% drop in Mercedes-Benz

following the carmaker cutting its full-year profit margin for

the second time in less than two months, after overall sales

volume fell in China.

Germany's DAX slid 0.7%. German producer prices

fell less than expected in August, decreasing by 0.8% on the

year versus expectations of a 1.0% decline.

Britain's FTSE 100 declined 0.6%, after a survey

showed consumer confidence dropped sharply to a six-month low in

September.

Investors now shift focus to euro zone's consumer confidence

data for September, due at 1400 GMT, for more clues on the

health of the region's economy.

Among other movers, Novo Nordisk advanced 0.5%

after the European Medicines Agency backed the use Danish

drugmaker's popular drug Wegovy to help ease heart failure in

people with obesity.

(Reporting by Shubham Batra in Bengaluru; Editing by Varun H K)