European shares fall in broad selloff, led by defence firm Thales

LONDON: European shares were lower on Tuesday in a broad selloff from the previous session's 29-month closing high, led by defence firm Thales after one of its joint contracts was scrapped.

Some strong individual results from corporate heavyweights including Xstrata, ArcelorMittal and UBS helped limit early losses, however.

At 0922 GMT, the FTSEurofirst 300 index 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 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.

Elsewhere, French telecoms firm Vivendi fell 2.7 percent the day after its SFR joint venture with Vodafone 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 led gainers, up 3.7 percent, on its plans for share buybacks and a higher dividend payout, after reporting bumper quarterly results.