European shares fall after slump in Nokia and Alcatel

* FTSEurofirst down 0.3 pct, Euro STOXX 50 down 0.7 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 (Adds quote, detail)

By Sudip Kar-Gupta

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, whose six percent fall in January was its worst monthly drop at the start of a year since 2008, dipped 0.3 percent to 1,344.38.

Germany's DAX and the euro zone's blue-chip Euro STOXX 50 fell 0.5 percent and 0.7 percent respectively.

Shares (Berlin: DI6.BE - news) in Nokia and Alcatel -- which Nokia is in the process of acquiring -- slumped around 10 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 6 percent, and 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 shakeup 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 keep stock markets under pressure.

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

"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.

The FTSEurofirst is down around 6 percent since the start of 2016 while the DAX is around 20 percent below a record high reached last April (LSE: 0N69.L - news) .

Among risers, Bankia climbed 5 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 16 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 Gareth Jones)