* FTSEurofirst 300 falls 0.7 pct after 2 days of gains
* Mining, energy shares sag along with commodities
* UBS rises after unveiling break-up plan
By Blaise Robinson
PARIS, Aug 12 (Reuters) - European stocks fell in early
trade on Tuesday, snapping a two-session rally, with mining and
energy shares retreating as metal prices tumbled and oil broke
below $114 a barrel driven by the U.S. dollar's gains.
UBS <UBSN.VX> rose 3 percent, reversing early losses, as the
stricken Swiss bank unveiled a plan to break up its business
into autonomous units and posted a worse-than-expected quarterly
loss.
The news failed to boost banks, with BNP Paribas <BNPP.PA>
down 2.6 percent, BBVA <BBVA.MC> down 1.4 percent and Barclays
<BARC.L> down 1.6 percent.
At 0820 GMT, the FTSEurofirst 300 <> index of top
European shares was down 0.7 percent at 1,204.93 points. The
index gained 1.2 percent on Monday, ending at a six-week closing
high.
Oil and gas producers were among the largest individual
drags on the broader market. Total <TOTF.PA> lost 0.4 percent,
Royal Dutch Shell <RDSa.L> fell 0.3 percent, while among metal
and mining companies, ArcelorMittal <MTP.PA> fell 1.9 percent
and Xstrata <XTA.L> shed 2.5 percent.
"Overall, the sentiment is not bad for stocks as commodities
retreat, but appetite for some metal and energy shares is
falling a bit," said Rik Zwaneveld, trader at AFS Brokers, in
Amsterdam.
U.S. crude oil futures <CLc1> fell $1 to $113.45 a barrel as
the rally in the dollar eclipsed worries over possible supply
disruptions due to the Russia-Georgia conflict.
The euro fell to a six-month low against the dollar <EUR=>
on Tuesday on growing concern that Europe is headed for a
sharper economic downturn than the market had first anticipated.
Copper prices fell to their lowest in over six months, hit
by the dollar and demand worries.
"(The drop in oil) is absolutely vital in terms of
sentiment. The big fear for the market continues to be inflation
and a lower oil price reduces the risk of inflation and the
effect of that. It gives central banks room to manoeuvre," said
Henk Potts, strategist at Barclays Stockbrokers in London.
Around Europe, Germany's DAX index <> was down 0.7
percent, Britain's FTSE 100 index <> down 0.7 percent and
France's CAC 40 <> down 0.7 percent.
Despite the rise on Tuesday, UBS stock is still down 49
percent this year, compared with a 27 percent fall in the DJ
Stoxx banking index <.SX7P>.
UBS, admitting there were problems with its one-bank model
said it would split its wealth management business from
investment banking.
The embattled bank said there had been net new money
outflows of almost 44 billion Swiss francs ($41 billion) as
customers fled -- compared with inflows of 34 billion francs a
year earlier -- and wrote down an additional $5.1 billion in
assets related to U.S. residential real estate and other
structured credit positions.
"The UBS news is really another sign that the situation
remains quite bad in the financial sector, so that won't improve
sentiment on banks," AFS Brokers' Zwaneveld said.
On the upside, Celesio <CLSGn.DE> rose 6.7 percent as
analysts said the worst could be over after Europe's biggest
drug distributor issued a profit warning for this year due to
prolonged tough competition and a price war in its key markets.
Beiersdorf <BEIG.DE> gained 4.7 percent after Goldman Sachs
upgraded the German maker of Nivea cream to "buy" from "neutral"
and added it to its "conviction buy" list.
(Additional reporting by Amanda Cooper in London; Editing by
David Cowell)
