* FTSEurofirst 300 down 0.4 pct, Euro STOXX 50 down 0.5 pct
* Vodafone rises after strong results, Vallourec drops
* Portuguese stocks underperform on political uncertainty
By Danilo Masoni
MILAN, Nov 10 (Reuters) - European shares reduced gains to turn lower by mid-morning on Tuesday as losses among commodity stocks and political uncertainty in Portugal more than offset a solid earnings reports from Vodafone.
The pan-European FTSEurofirst 300 was down 0.4 percent, giving up initial gains, and the euro zone’s blue-chip Euro STOXX 50 index was down 0.5 percent.
Shares had opened higher on the back of a weaker euro, which makes investment in the region more attractive, but pared gains as commodities stocks extended falls and U.S. futures indicate a lower open at Wall Street.
The European mining index was the top sectoral faller with a drop of 1.4 percent, as London copper prices moved closer to a six-year low on Tuesday amid a firmer dollar and prolonged economic weakness in top metals consumer China.
Roberto Lottici, a fund manager at Italy’s Ifigest, said expectations of central bank support was providing a floor to European equities but suggested to be selective on single stocks and consolidate gains as the year end approaches.
Vallourec fell more than 9 percent after reporting a third-quarter loss against a backdrop of falling demand from its oil and gas customers and said it did not expect market conditions to improve in the short-term.
But Vodafone rose more than 4 percent after the British phone group reported a better-than-expected acceleration in second-quarter revenue growth, helping it nudge its annual expectations towards the top of its guidance.
Dialog Semiconductor was another bright spot, rising 5.3 percent, after activist hedge fund Elliott disclosed a 2.9 pct stake in the German chipmaker and opposed the acquisition of U.S. peer Atmel.
Portugal’s PSI 20 index fell 2.3 percent as leftwing parties looked set to oust a minority centre-right government on Tuesday in a parliamentary vote, part of a drive to set up their own Socialist-led administration they hope will put an end to years of harsh austerity.
“Events unfolding in Portugal are especially closely watched because their much larger neighbour Spain will also be holding elections in late December which depending on the outcome could push the Eurozone back into a crisis,” said Peregrine & Black sales trader Markus Huber. (Reporting by Danilo Masoni; Editing by Tom Heneghan)