European shares fall after slump in Nokia and Alcatel

* FTSEurofirst down 0.3 pct, Euro STOXX 50 down 0.8 pct

* Nokia (Milan: 23568.MI - news) , Alcatel (Paris: FR0000130007 - news) fall after Samsung settlement

* Bankia (Amsterdam: QU8.AS - news) rises after reporting higher profits

* Italian bank stocks also gain on prospect of M&A (Updates with closing prices)

By Sudip Kar-Gupta and Alistair Smout

LONDON, Feb 1 (Reuters) - European shares fell on Monday, pulled lower by telecom equipment stocks amid investor disappointment over the terms of a deal between Nokia and Samsung to settle a legal dispute.

The pan-European FTSEurofirst 300 index, which fell 6 percent in January in its biggest monthly drop at the start of a year since 2008, dipped 0.38 percent to 1,344.75.

Germany's DAX and the euro zone's blue-chip Euro STOXX 50 fell 0.4 percent and 0.8 percent respectively.

Shares (Berlin: DI6.BE - news) in Nokia and Alcatel -- which Nokia is in the process of acquiring -- slumped around 11 percent after traders expressed disappointment with the terms of Nokia's settlement of a patent dispute with Samsung.

Among other fallers, the abrupt departure of Luxottica (Milan: LUX.MI - news) 's third chief executive in 17 months sent shares in the glasses firm down 5.7 percent, and fuelled concerns about strategy and the ability of the group's 80-year-old founder to steer the company in a more challenging market.

"Luxottica's predictable and stable revenue base is not matched by its senior management team," analysts at Barclays (Swiss: BARC.SW - news) said in a note.

"Given the shake-up 18 months ago, we believe this will be greeted with some scepticism by investors."

Traders said weak data from China, the world's second-biggest economy, would also weigh on stock markets.

It (Other OTC: ITGL - news) helped to put oil prices under pressure, after they rallied towards the end of last week. The weak data from China and fading hopes that OPEC might act to cut back supply sent U.S (Other OTC: UBGXF - news) . crude over 5 percent lower.

The STOXX Europe 600 oil and gas sector fell 1.4 percent, among top sectoral fallers.

"Disappointment over the Chinese data will dampen sentiment. For the medium term, I would definitely look to sell out on any market rallies," said Hantec Markets' analyst Richard Perry.

PMI surveys on Monday also showed a slowdown in factory growth across the euro zone.

Among risers, Bankia gained 2.2 percent after the state-controlled Spanish bank reported higher profits.

Shares in Banco Popolare (Amsterdam: PB8.AS - news) and other Italian banks also rose after the lender said it expected to agree a merger with Banca Popolare di Milano (Milan: PMI.MI - news) within a month, signalling the start of a long-awaited consolidation of Italy's fragmented banking sector.

France's Vallourec (Xetra: VAC.DE - news) rose nearly 8 percent after the oil industry tubing maker saw a trading halt lifted at noon, following the announcement of an extensive restructuring plan.

Shares in the firm fell 14 percent in the previous session.

Today's European research round-up (Editing by Toby Chopra)