* FTSEurofirst 300 index slips 0.1 percent
* Royal Dutch Shell falls after results miss expectations
* Carmakers slip, traders say near end of outperformance
* For up-to-the minute market news, click on []
By Joanne Frearson
LONDON, Feb 3 (Reuters) - European shares edged lower on
Thursday as traders awaited details of the European Central
Bank's two-day monetary policy meeting and its plans to fight
inflation.
By 0957 GMT, the pan-European FTSEurofirst 300 <>
index of top shares was down 0.1 percent at 1,161.336 points,
having dipped as low as 1,154.96.
Earlier session losses were pared after data showed the
Markit Eurozone Services Purchasing Managers' Index expanded
faster than initially thought in January, but the main event is
the outcome of the ECB meeting. []
"Investors will be focused on the ECB meeting and want a
clear-cut statement on how it plans to combat inflation," Heino
Ruland, strategist at Ruland Research in Frankfurt said.
The ECB is expected to keep interest rates on hold, but send
a sharper tone that it is ready to tackle rising inflationary
pressures in the euro zone. []
"We have seen a lot of companies complain about rising input
costs and how these are now going to be passed onto the
customer. This is not good news, and inflation needs to be
tackled," Ruland said.
Oil stocks featured among the worst performers. The STOXX
Europe 600 Oil & Gas <.SXEP> index fell 1.2 percent, while Royal
Dutch Shell slipped 2.9 percent after results fell short of
market expectations. []
European automakers were also in decline after traders said
the sector had neared the end of its outperformance cycle.
The STOXX Europe 600 Automobiles & Parts <.SXAP> was down
0.6 percent, while Peugeot <PEUP.PA>, Daimler <DAIGn.DE> and
Renault <RENA.PA> fell between 0.7 and 1.8 percent.
"The index slips below its last low from Jan. 24, which
confirms the end of outperformance (of the sector)," a trader
said, adding that, for portfolio managers, this is the last
signal to switch from "overweight" to "equalweight".
ACS DROPS
Spanish builder ACS <ACS.MC> dropped 7.9 percent after Corp
Alba <CFA.MC> said it had placed 5 percent of ACS with
institutional investors at 34 euros per share, 9 percent lower
than ACS's closing price yesterday.
On the upside, Nordic and emerging market telecoms firm
TeliaSonera <TLSN.ST> gained 3.3 percent after the company said
it would buy back around 10 billion crowns ($1.56 billion) of
its shares. []
British telecoms provider BT <BT.L> rose 3.3 percent after
it said its recovering Global Services unit would generate free
cash flow this year, and it reported a 7 percent increase in
third-quarter core profit as it continued to cut costs.
[]
Technical indicators showed the market was nearing
overbought territory. The relative strength index (RSI) on the
euro zone's blue chip Euro STOXX 50 <> index rose to 66
on Wednesday, but had fallen back to 62.5 on Thursday. Seventy
and above is considered overbought territory.
Across Europe, the FTSE 100 <> index was down 0.3
percent, Germany's DAX <> was up 0.1 percent, and France's
CAC 40 <> fell 1 percent.
(Reporting by Joanne Frearson; Editing by Will Waterman)
