Russia-exposed European shares knocked back by new sanctions

* FTSEurofirst 300 falls 0.2 pct

* Raiffeisen, Metro (Other OTC: MTRAF - news) among top fallers

* Earnings pin back Sandvik (Other OTC: SDVKF - news) , SGS (Other OTC: SGSOF - news)

* Market consolidates after biggest rise since April

By Alistair Smout

EDINBURGH, July 17 (Reuters) - European stocks fell on Thursday, with appetite for equities dented by new Western sanctions on Russia and a mixed earnings picture.

Stocks with high exposure to Russia were among the top fallers after the European Union and the United States increased sanctions on the country.

Austrian bank Raiffeisen fell 2.9 percent, with German retailer Metro down 2.4 percent and Italy's Unicredit (Milan: UCG.MI - news) dipping 1.3 percent.

"As with the first and second round of sanctions, people are using the market conditions to trade those stocks with a bit more Russia exposure," Ioan Smith, director at KCG, said.

Smith said the sanctions came at a bad time for Raiffeisen in particular, given the struggles that Austrian banks have had in Hungary and Bulgaria in recent weeks.

Earnings newsflow accounted for many of the big individual movers on the pan-European FTSEurofirst 300, with engineering group Sandvik and testing and inspection company SGS down 3.5 percent and 3.1 percent respectively after missing consensus estimates.

Shares (Frankfurt: DI6.F - news) of Swiss drugmaker Novartis (Xetra: 904278 - news) dropped 1 percent, taking the most points off of the index after second-quarter sales fell slightly short of expectations.

However German business software maker SAP bucked the trend, rising 3.3 percent despite reporting a smaller-than-expected second-quarter operating profit, after raising its outlook for its web-based software services.

ITV (LSE: ITV.L - news) was another strong riser, up 6.6 percent after Britain's pay-TV group BSkyB sold a 6.4 percent stake in the broadcaster to cable group Liberty Global (NasdaqGS: LBTYA - news) .

The pan-European FTSEurofirst 300 index was down 0.3 percent at 1,373.06 by 0815 GMT, having gained 1.3 percent yesterday, the biggest rise for the FTSEurofirst 300 since April.

"The market overall, given the largest rally in 3 months, will see some natural profit taking today," Atif Latif, director of trading at Guardian Stockbrokers, said, adding that he didn't believe the falls would last long, with the market already off its intraday low.

"Overall the market remains in good shape for a move higher after this consolidation phase and we are seeing good volume on weakness re-entering the market."

For a list of companies with high exposure to Russia, please click on:

Europe bourses in 2014: http://link.reuters.com/pap87v

Asset performance in 2014: http://link.reuters.com/gap87v

Today's European research round-up

(Editing by Janet Lawrence)