European shares fall as Shell and Dialog results weigh

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* Dialog slumps after cutting sales forecast

* Shell and Lloyds shares also fall

* But Neste surges to record high

* STOXX 600 index down 6 pct so far in 2016

By Sudip Kar-Gupta

LONDON, July 28 (Reuters) - European stocks slipped on Thursday, weighed down by weak updates from companies including Dialog Semiconductor and oil major Royal Dutch Shell .

The pan-European STOXX 600 index dipped 0.1 percent, while the FTSEurofirst 300 index fell 0.2 percent.

Dialog dropped 8 percent, among the worst-performers on the STOXX 600, after the German company cut its 2016 sales outlook, while Shell fell by 3.9 percent after it reported a profit slump.

Analysts noted that Dialog’s update was even more disappointing given a well-received update earlier this week from Apple - Dialog’s biggest client - which saw Apple shares rise in New York.

Shares in British bank Lloyds also fell 3 percent after Lloyds warned of a likely drop in demand caused by Britain’s vote to quit the European Union and added it would accelerate its cost-cutting plan.

The STOXX 600 has rebounded by around 10 percent from a low point reached on June 27 after the shock Brexit vote, but it remains down by around 6 percent so far in 2016.

Credit Suisse’s equity strategists said that many investors remained pessimistic about European equities.

Italian banks’ bad debts remain a cause of concern, and the Credit Suisse strategists added Brexit had reawakened fears among U.S clients over the euro zone, with valuations at levels last seen during the Greek economic crisis of 2011.

“Outflows are close to record highs, valuations are back to Greek crisis lows on P/E relatives yet earnings and economic momentum are showing signs of relative stability,” they wrote.

Roche Brune Asset Management fund manager Gregoire Laverne and Prime Partners’ chief investment officer Francois Savary saw some positive signs from the European corporate results season.

Finnish refiner Neste surged 10 percent to a record high after its second-quarter profit beat forecasts, while engineer Rolls Royce jumped 12 percent after forecasting an improvement in profit.

“European companies are generally looking to be on the right sort of path. Even if sales are not necessarily increasing, margins are increasing,” said Laverne, European equities fund manager at Roche Brune Asset Management. (Editing by Alexander Smith)