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* FTSEurofirst 300 down 0.5 pct, Euro STOXX 50 falls 0.8 pct
* HSBC and Munich Re take most points off FTSEurofirst
* Expect more near-term volatility -Schroders fund manager
By Sudip Kar-Gupta
LONDON, Aug 6 (Reuters) - European shares fell on Tuesday, hit by declines in financial heavyweights HSBC and Munich Re, and some traders predicted more weakness as investors look to book profits on last month's rally.
The pan-European FTSEurofirst 300 index was down by 0.5 percent at 1,219.49 points in late session trade, breaking a six-day winning streak. The euro zone's blue-chip Euro STOXX 50 index fell 0.8 percent to 2,788.12 points.
British bank HSBC drew selling for a second consecutive day after several brokers cut their ratings and price targets on the stock following disappointing interim results on Monday.
It dropped 1 percent, taking the most points off the FTSEurofirst 300 and adding to a 4.4 percent decline on Monday in reaction to the results.
Reinsurer Munich Re tumbled 5.8 percent after its second-quarter net profits fell more than forecast.
Logic Investments' strategy head Peter Rice said many investors were selling to book profits on a month-long rally that saw the FTSEurofirst 300 rise 10 percent from a 2013 low of 1,111.11 points reached in late June.
"I think we will see a bit more profit taking coming in in future sessions. We've had a good run up and investors are looking to take money off the table," he said.
Other investors took a more positive view, arguing that European equities would rise towards the end of the year as the European economy continues to show signs of emerging from the blows inflicted by the euro zone's sovereign debt crisis.
Data on Tuesday showed that German industry orders far exceeded forecasts in June, while Italy's economy shrank less than expected in the second quarter.
However, Schroders fund manager and global head of macro Bob Jolly was more cautious, arguing that financial markets would be volatile as investors prepare for an eventual scaling back in stimulus measures from the U.S. Federal Reserve.
"We expect market volatility to remain high in the coming months and have moved to a more cautious stance," said Jolly.