UPDATE 2-European stocks slip as defensives weigh, UK shrugs off latest lockdown

(For a Reuters live blog on U.S., UK and European stock
markets, click LIVE/ or type LIVE/ in a news window)

* BP, Shell biggest boosts to UK's FTSE 100

* Next jumps after Christmas sales update

* Dialog Semi gains on upbeat Q4 sales forecast
(Updates prices throughout, adds comments)

By Amal S and Shreyashi Sanyal

Jan 5 (Reuters) - European stocks slipped on Tuesday as
losses in defensive sectors offset gains in oil and retail
stocks, while investors looked past a new national lockdown in
Britain aimed at curbing a coronavirus surge.

The pan-European STOXX 600 index fell 0.2%,
following losses on Wall Street over worries about Senate
runoffs in the U.S. state of Georgia.

UK's FTSE 100 rose 0.6%, boosted by oil majors Royal
Dutch Shell and BP, as crude prices inched
higher with deadlocked talks between major producers about
potential changes in February output set to continue.

The domestically focussed midcap index gained 0.9%
as UK's finance minister Rishi Sunak announced plans to support
businesses struggling under a third COVID-19 lockdown.

"The stock market reaction to a new lockdown in England
could have been a lot worse, but it is fair to say there were
plenty of signs in recent days that full lockdown was coming,
such as similar restrictions being announced in Scotland
yesterday," said Russ Mould, investment director at AJ Bell.

"Nonetheless, given the severity of the lockdown
restrictions... one might have expected a repeat of last year's
trends with lockdown losers slumping on the stock market and
beneficiaries rallying. That's not entirely the case this time
round."

European stocks rallied to fresh February highs on the first
trading session in 2021 on Monday on hopes the vaccines will
spur a speedy economic rebound.

The global mood dampened on Tuesday ahead of the Senate
election outcome, which could have a big impact on incoming U.S.
President Joe Biden's ability to pursue his preferred economic
policies.

Stocks considered as safe-havens like utilities,
healthcare and food & beverage were among the
biggest sectoral decliners in Europe.

Germany's DAX index dropped 0.6% with the
government looking to extend a lockdown, while France's CAC 40
slipped 0.4%.

Retailers were a bright spot, with Britain's Next
jumping 8.0% after it said its Christmas sales were much better
than expected.

Shares in Marks and Spencer, Morrisons and
Tesco rose between 0.2% and 1.2% after market
researcher Kantar said British grocery sales hit a record high
in December.

German chipmaker Dialog Semiconductor PLC gained
2.7% after it gave an upbeat fourth-quarter revenue forecast due
to strong demand for 5G phones and tablets.

ASML rose 0.2% after analysts at RBC and Liberum
raised their price targets on the stock.
(Reporting by Amal S and Sruthi Shankar in Bengaluru; Editing
by Sriraj Kalluvila, William Maclean)