European shares fall in broad selloff, led by Thales

                                
 * FTSEurofirst 300 index down 0.2 pct
                                
 * Pulls back from previous session's 29-mth closing high
                                
 * Thales hit by contract loss
                                
 * For up-to-the minute market news, click on [STXNEWS/EU]
                                
 
                                
 By Simon Jessop
                                
 LONDON, Feb 8 (Reuters) - European shares were lower on
Tuesday in a broad selloff from the previous session's 29-month
closing high, led by defence firm Thales <TCFP.PA> after one of
its joint contracts was scrapped.
                                
 Some strong individual results from corporate heavyweights
including Xstrata <XTA.L>, ArcelorMittal <ISPA.AS> and UBS
<UBSN.VX> helped limit early losses, however.
  At 0922 GMT, the FTSEurofirst 300 index <.FTEU3> of leading
European shares was trading down 0.2 percent at 1,174.37 points,
after closing on Monday at 1,176.81 points, weighed by
technicals after a good February run.
                                
 The ESTOXX 50 blue-chip index <.STOXX50E> was down 0.1
percent on Tuesday after its Relative Strength Index, an
indicator of momentum, neared overbought territory.
                                
 Sentiment was expected to remain "very much earnings-driven"
said Manoj Ladwa, senior trader at London-based ETX Capital,
with traders expected to "take some time to reflect on recent
gains", added Jonathan Sudaria, night dealer at Capital Spreads.
                                
 Leading the index lower was French defence firm Thales,
which fell 2.7 percent after the UK government ditched plans for
a new search-and-rescue helicopter. A consortium including
Thales had been the preferred bidder. [ID:nLDE71709X]
                                
 Elsewhere, French telecoms firm Vivendi <VIV.PA> fell 2.7
percent the day after its SFR joint venture with Vodafone
<VOD.L> said it would absorb an increase in French value-added
tax for existing customers. Vodafone was down 0.2 percent.
                                
 
                                
 AUTOS SHINE
                                
 On the upside, Swedish lender Swedbank <SWEDa.ST> led
gainers, up 3.7 percent, on its plans for share buybacks and a
higher dividend payout, after reporting bumper quarterly
results. [ID:nLDE71703Y]
                                
 Also bucking a 0.4 percent weaker STOXX Europe 600 Banks
<.SX7P> index was UBS <UBS.N><UBSN.VX>, up 1.7 percent after it
said it saw strong client inflows in 2011. [ID:nLDE71625L]
                                
 Top sectoral gainer was the STOXX Europe 600 Automobiles &
Parts <.SXAP> index, which rose 1.6 percent led by a 3.3 percent
gain for French car parts maker Valeo <VLOF.PA> and 2.3 percent
gain for Peugeot <PEUP.PA>.
                                
 Both stocks had been supported by forecast-beating earnings
for peer Faurecia <EPED.PA> and a strong outlook overnight from
Japanese firm Toyota Motor Corp <7203.T>. [ID:nLDE71703D]
[ID:nL3E7D804S]
                                
 Elsewhere on the upside, the world's largest steelmaker,
ArcelorMittal <ISPA.AS>, up 3.6 percent, hit a nine-month high
on forecast-beating quarterly results and its expectation for a
recovery in demand and prices in 2011. [ID:nLDE71703X]
                                
 Also helping the STOXX Europe 600 Basic Resources <.SXPP>
back into the black after early falls was UK-listed miner
Xstrata <XTA.L>, which rose 1.3 percent on forecast-beating
results. [ID:nLAG006411]
                                
 Across Europe, the FTSE 100 <.FTSE> index fell 0.1 percent,
Germany's DAX <.GDAXI> was up 0.1 percent and France's CAC 40
<.FCHI> was flat.
 (Editing by Jon Loades-Carter)