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* FTSEurofirst 300 ends flat after touching two-week highs
* Fiat Chrysler leads auto sector lower after downgrade
* Taylor Wimpey, Vodafone surge after update
* Greek banks rise after upbeat UBS note
By Atul Prakash and Danilo Masoni
LONDON/MILAN, May 17 (Reuters) - European shares steadied onTuesday with gains in companies such as Taylor Wimpey andVodafone following encouraging updates and a rally inmining companies offset by a weaker auto sector.
The pan-European FTSEurofirst 300 ended littlechanged after earlier rising to its highest since early May. Theindex, which closed flat also in the previous session, is stilldown over 8 percent this year.
Taylor Wimpey advanced 4.7 percent after the housebuilderannounced a new special payout, promising investors about 1.3billion pounds over three years, underpinned by strong demandfor property in Britain.
Vodafone rose 1.5 percent after the world's second-largestmobile phone operator said its earnings growth would acceleratethis year. The group said a programme to improve its networkshad boosted demand in Europe and helped it to return tounderlying growth in 2016 revenue and core earnings for thefirst time since 2008.
"Demand for data continues to grow strongly...and Vodafonehave invested heavily in infrastructure to capitalise on this,"Steve Clayton, head of equity research at Hargreaves Lansdown,said.
The STOXX Europe 600 Auto index fell 2.7 percent,making it the top sectoral loser. Fiat Chrysler (FCA) fell 6.7 percent after Exane BNP Paribas downgrades the stock to"underperform".
"After 7 years of global auto expansion - and unprecedentedNAFTA returns - FCA has done too little to insure itself againsta downturn in our view. As the end of a lease driven bubbleapproaches, and M&A optionality fades, FCA looks out of time,"it said in a note.
Greek banks advanced 3.7 percent, with UBSturning more positive on the Greek banking sector arguing thatsigns of progress in talks with Greece's lenders meant thesector could rebound.
"The starting point is very challenging and risks abound,but we see a fundamental investment case and valuations suggestupside potential," UBS analysts said, referring to Greek banks.
The STOXX Europe 600 Basic Resources index rose 1.9percent, as copper prices were supported by a softer dollar andfirm oil, but remained within sight of recent lows brought aboutby a resurfacing of worries over demand growth in top consumerChina.
Today's European research round-up
ADVISORY- Reuters plans to replace intra-day European and UKstock market reports with a Live Markets blog on Eikon (see cpurl://apps.cp./cms/?pageId=livemarkets for site in development). In a real-time, multimedia formatfrom 0600 London time through the 1630 closing bell, it willinclude the best of our market reporting, Stocks Buzz service,Eikon graphics, Reuters pictures, eye-catching research andmarket zeitgeist. Breaking news and dramatic market moves willcontinue to be alerted to all clients and we will continue toprovide a short opening story and comprehensive closing reports.
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Mike Dolan, Markets Editor EMEA. (Additional reporting by Sudip Kar-Gupta; Editing by AlisonWilliams)
