Germany leads European shares lower after industrial orders fall

(ADVISORY- Reuters plans to replace intra-day European and UK stock market reports with a Live Markets blog on Eikon - see cpurl://apps.cp./cms/?pageId=livemarkets for site in development. See the bottom of the report for more details)

* FTSEurofirst 300 falls 1.5 pct, Germany's DAX down 2.3 pct

* Peugeot (Other OTC: PUGOF - news) announces strategy, leads auto shares lower

* ThyssenKrupp (LSE: 0O1C.L - news) falls after Vale deal confirmed

By Alistair Smout

LONDON, April 5 (Reuters) - European shares fell on Tuesday, led lower by German stocks after industrial orders unexpectedly dropped in Europe's biggest economy, with exporters such as autos also coming under pressure.

German industrial orders fell in February in a surprise for economists, due to weaker foreign demand, particularly from euro zone countries.

While domestic demand rose, foreign orders slipped 2.7 percent, suggesting a slowdown in the global economy was leaving its mark.

Other surveys found that French business activity had stagnated, while Germany's private sector was supported by a vibrant service sector. However, despite domestic resilience, the damage had been done to Germany's export oriented blue-chip index.

Germany's DAX fell 2.3 percent, underperforming a 1.5 percent drop for the FTSEurofirst 300 to 1,292.48.

Exporters and other globally-exposed stocks were hit across the region, with autos down 3.1 percent and mining stocks down 3.8 percent.

A top faller on the FTSEurofirst 300 was Peugeot, down 6 percent in early deals after the carmaker outlined plans on Tuesday to return to consistent sales growth.

Shares (Berlin: DI6.BE - news) in the firm last traded down 4 percent. Traders said that while the plan would be hard work, it could present an opportunity to turn the firm around.

"The guidance, to increase and stabilise margins from a low base, will be tough but achievable," said Atif Latif, director of trading at Guardian Stockbrokers.

"The margin recovery story is in its infancy and we see the opportunity for this to be the key driver... Overall we remain positive."

Peers Renault and Volkswagen (LSE: 0P6N.L - news) fell 3.3 and 3 percent respectively.

Shares in ThyssenKrupp fell 4.2 percent, the top faller on the FTSEurofirst 300. It (Other OTC: ITGL - news) was down for a second day, after it was confirmed that Brazilian miner Vale SA will sell its entire 26.87 percent stake in the struggling CSA steel plant to the German firm.

The firm had rallied week on hopes that it could from consolidation in the European steel industry. However, shares have been under pressure since the weekend, when Reuters exclusively reported that Vale was finalising a deal.

Commodity firms came under selling pressure, with the oil and gas sector down 2.5 percent.

Oil prices continued to fall, hit by weakening demand for gasoline and persistent doubts on whether crude producers will be able to reach an agreement to rein in a worldwide supply glut dragged on the market.

Reassurances by a Kuwaiti official that an April 17 meeting between oil producers should produce an agreement to freeze output did not boost brent crude prices, which remained 1 percent lower.

Today's European research round-up

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Mike Dolan, Markets Editor EMEA.

(Editing by Raissa Kasolowsky)