Renault slides as European shares edge lower

Reuters

* FTSEurofirst 300 down 0.1 pct, ESTOXX 50 down 0.2 pct

* Renault falls after partner Nissan cuts outlook

* Meggitt also slumps after cutting guidance

By Sudip Kar-Gupta

LONDON, Nov 1 (Reuters) - Fresh signs of corporate earningsweakness pegged back European stock markets on Friday, pushingindexes off multi-year highs and hitting carmaker Renault.

The pan-European FTSEurofirst 300 index fell 0.1percent to 1,290.93 points in mid-session trade, while the eurozone's blue-chip Euro STOXX 50 index declined by 0.2percent to 3,060.89 points.

Germany's DAX fell 0.1 percent to 9,022.93 points,retreating from a record high of 9,070.17 reached on Wednesday, while the FTSEurofirst 300 slipped back from a 5-year high of1,296.37 the same day.

Renault was the worst-performing stock on the FTSEurofirst300 index, falling 5.4 percent after its Japanese partner Nissan cut its profit outlook.

UK aircraft parts supplier Meggitt lost a tenth ofits stock market value after cutting its revenue guidance, whichfurther highlighted a weak set of third quarter results frommany European companies.

According to Thomson Reuters StarMine data, 53 percent ofcompanies on the pan-European STOXX 600 index havemissed market expectations with their results.

Kevin Lilley, head of European equities at Old Mutual GlobalInvestors, said he was not too concerned by the weak thirdquarter results. He felt 2014 would better for companies as theEuropean economy gradually recovered from the effects of theregion's sovereign debt crisis.

"Companies are missing on the revenue side but they're notdoing too badly on the profit side," said Lilley.

"For me, it's still very comfortable. We're beginning toemerge out of recession in Europe and people will have greaterconfidence in 2014."

PROFIT TAKING

Some traders have used the weak results issued by severalcompanies this week to trim back equity positions in order tobook profits after stock markets gained ground in October.

The FTSEurofirst 300 rose 4 percent in October and is up byaround 14 percent since the start of 2013.

Lilley said he had taken profits by selling some shares inFrench media group Vivendi, up 10 percent since thestart of the year, while keeping overweight in bank stocks whichtend to outperform in an improving economy.

Both Lilley and Tavira Securities' Toby Campbell-Gray feltany retreat on European equity markets at the start of Novemberwould be relatively short-lived, as they expected a rally intothe end of the year.

Campbell-Gray said the equity market was still one for bullsrather than bears. "You don't get too rich by being a bear inthis market," he said.

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