European stocks fall in early trade; UBS rises
* 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
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 .FTEU3 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 .GDAXI was down 0.7 percent, Britain's FTSE 100 index .FTSE down 0.7 percent and France's CAC 40 .FCHI down 0.7 percent. Continued...
