MILAN (Reuters) - European shares were little changed in early deals on Friday as investors digested a flurry of earnings updates, with French auto parts maker Valeo <VLOF.PA> and Royal Bank of Scotland <RBS.L> among the top fallers.


Valeo slumped 9 percent to a six-month low as its second-half profit fell on adverse exchange rates and raw material prices, while RBS declined 4 percent after posting its first full-year profit since 2007. Traders said the underlying result missed expectations.


Oil services firm Subsea 7 <SUBC.OL> jumped 6.3 percent after news of joint venture talks with larger rival Schlumberger <SLB.N>, and strength among telecoms <.SXKP> stocks, which led sectoral gainers, up 1 percent.


Telecoms were lifted by a 3.1 percent rise in BT Group <BT.L> after Britain's telecom regulator OFCOM detailed rules encouraging more fiber broadband investment -- including a decision not to regulate wholesale prices of some superfast broadband products sold by its Openreach division.


The pan-European STOXX benchmark index <.STOXX> was flat in percentage terms by 0817 GMT, while the UK's FTSE <.FTSE> dipped 0.2 percent and Germany's DAX <.GDAXI> was flat.


The STOXX is set to end the week flat as markets stabilize and volatility calms following a turbulent start of the month that sent the index to a near-six-month low. The STOXX is now 3.5 percent above that low.

(Reporting by Danilo Masoni; editing by Tom Pfeiffer)