(Adds quote, details)
* Pan-European FTSEurofirst 300 index down 0.2 pct
* Deutsche Bank, Barclays fall after updates
* Nokia surges after strong results
* Telecom Italia rallies on report of stake purchase
By Atul Prakash and Danilo Masoni
LONDON/MILAN, Oct 29 (Reuters) - European shares fell on Thursday, after disappointing updates from companies like Deutsche Bank, Saint-Gobain and Barclays and a sharp drop in mining shares.
Deutsche Bank slipped 4.8 percent after scrapping its dividend. Barclays was down 5.2 percent following a 10-percent drop in quarterly profits. Saint-Gobain fell 5.4 percent after saying its results were hit by a contraction in France.
"Deutsche Bank is cutting its dividend, and the story for the banking sector as a whole is that they are going to struggle to get back to their earlier levels of profitability, given the amount of regulation going on," said Clairinvest fund manager Ion-Marc Valahu.
The pan-European FTSEurofirst 300 index < .FTEU3> was down 0.24 percent at 1,481 points by 0939 GMT after rising to a high of 1,490 points earlier in the session.
European equities turned lower after metals prices extended losses, following a rally by the dollar. That would make commodities more expensive for holders of other currencies.
The STOXX Europe 600 Basic Resources index fell 2.5 percent, the biggest decline in Europe. BHP Billiton, Rio Tinto and Anglo American fell 3.1 to 4.6 percent.
The market in Europe failed to track gains on Wall Street, where a reference by the Federal Reserve to a possible rate increase in December was taken as vote of confidence in the U.S. economy.
According to JCI Capital analyst Emanuele Rigamonti, gains in the United States supported the view the Fed would keep its market-friendly attitude and fine-tune the pace of rate hikes, which would be favourable scenario for risky assets.
"Today the European markets opened on a softer note, possibly pondering the alternative scenario of less market friendliness by the Fed, along with some profit taking on recent strength," he said.
The Fed also did not mention global conditions in its statement late on Wednesday. When it held rates steady last month, the Fed expressed concern that a slowing global economy could threaten the U.S. outlook.
Telecom Italia soared 5.9 percent following a Bloomberg report that Iliad founder Xavier Niel bought a minority stake in the company.
Nokia surged 9.5 percent after reporting stronger-than-expected profits and announcing a new shareholder return plan.
Telecoms equipment maker Alcatel-Lucent rose 9 percent even though it posted a net loss in the third quarter. The company said revenues from its core networking products rose and Nokia's plan to buy it was on track for the first quarter.
Today's European research round-up (Additional reporting by Sudip Kar-Gupta, editing by Larry King)