* FTSEurofirst 300 falls 0.4 percent
* Natixis suspended on report of assets guarantee
* For up-to-the-minute stocks news, click on []
By Brian Gorman
LONDON, Aug 25 (Reuters) - European shares fell back in
early trade on Tuesday from the 10-month closing highs they hit
in the previous session as investors took profits and after
declines in Asia.
At 0832 GMT, the FTSEurofirst 300 <> index of top
European shares was down 0.4 percent at 971.54 points.
The European benchmark index is still up 50 percent from its
lifetime low of March 9, as investors have become more confident
on the prospects for worldwide economic recovery. Data on
Tuesday confirmed that Germany, the region's biggest economy,
exited recession in the second quarter. []
"We've enjoyed the euphoria. (The fall in shares) is
profit-taking and worries about China," said David Buik, senior
partner at BGC Partners. "And the U.S. Budget deficit has reared
its ugly head again. But I don't see it as a serious correction,
which won't happen till people get back from holiday."
The sell-off was across the board, but the heavyweight
banking sector took most points off the index.
BNP Paribas <BNPP.PA>, Banco Santander <SAN.MC>, UBS
<UBSN.VX> and UniCredit <CRDI.MI> fell between 1 and 1.7
percent.
Shares in France's Natixis <CNAT.PA>, which reports on
Thursday, have been suspended from trading for the day,
following a report that majority owner BPCE will guarantee some
of its toxic assets. []
Miners fell as metals prices retreated from recent highs.
Anglo American <AAL.L>, Antofagasta <ANTO.L>, BHP Billiton
<BLT.L>, Lonmin <LMI.L>, Rio Tinto <RIO.L> and Xstrata <XTA.L>
fell between 1.5 and 3.7 percent.
Crude prices <CLc1> slipped 0.8 percent to less than $74 a
barrel, impacting oil shares. Total <TOTF.PA>, ENI <ENI.MI>, BP
<BP.L>, Royal Dutch Shell <RDSa.L> and StatoilHydro <STL.OL>
fell between 0.7 and 1.2 percent.
British oil explorer Cairn Energy <CNE.L> fell 2.7 percent
after warning that meeting targets for the next stages of the
development was becoming "increasingly challenging", as it
reported a first-half loss after tax. []
Across Europe, Britain's FTSE 100 <>, Germany's DAX
<> and France's CAC-40 <> were down between 0.4 and
0.5 percent.
DEFENSIVES GAIN
Defensive sectors, notably pharmaceuticals and telecoms,
were among the small number of risers.
Mobile telecoms firm Vodafone <VOD.L> gained 1.4 percent
after JPMorgan upgraded the telecoms sector to "overweight", and
advised exposure to the stock.
The broker said the telecoms sector is favoured by cheap
valuations and seasonal trading patterns that have led the
sector to consistently outperform in the final months of most
years since 1995. It was also "overweight" in France Telecom
<FTE.PA>, which rose 1.8 percent, and KPN <KPN.AS>, up 1.6
percent.
Among drugmakers, GlaxoSmithKline <GSK.L> and Sanofi-Aventis
<SASY.PA> rose 0.6 and 0.7 percent respectively.
Beauty products giant L'Oreal <OREP.PA>, which reports
results on Thursday, rose 1.5 percent after Jefferies upgraded
it to "buy" from "hold".
In other broker-inspired moves, German tourism group TUI
<TUIGn.DE> surged 7.5 percent after Morgan Stanley upgraded it
to "overweight" from "equal weight".
Irish building materials group CRH <CRH.I> fell 1.4 percent
after posting a sharp drop in first-half pretax profit and
saying the rate of decline would ease in the second half due to
cost-cutting and improvements in its core U.S. market.
[]
Japan's Nikkei 225 <> closed 0.8 percent lower. China's
benchmark Shanghai Composite <> was down 2.6 percent,
having been down more than 5 percent earlier.
Analysts pointed to the volatility in the Chinese market,
which has enjoyed a strong run, and said that in the longer
term, it is not correlated to other markets.
Later in the session, investors' attention will switch to
key macroeconomic data from the United States on house prices
and consumer confidence.
(Editing by Jon Loades-Carter)
