European equities weighed down by earnings worries
* FTSEurofirst 300 down 0.2 pct after six weeks of gains * Earnings season off to a gloomy start, more to come * Technical charts offer some support to EuroSTOXX 50 By Toni Vorobyova LONDON, July 16 (Reuters) - European shares edged down on Monday, with investors reluctant to push the market higher after six weeks of gains in the early stages of a second quarter earnings season that is bringing signs the euro zone crisis is weighing on profits. UK software marker Sage said conditions in European markets have toughened, clothing retailer Hennes & Mauritz posted slower than expected sales growth in June and Swedish banking group SEB warned that Europe's austerity measures and sovereign debt woes could start to infiltrate its traditionally robust core Nordic markets. "I wouldn't say there is too much optimism," said Francois Duhen, equity strategist at CM-CIC Securities in Paris. "To my clients, I am calling it a profit warning season." The FTSEurofirst 300 fell 0.2 percent to 1,040.19 points by 0738 GMT, with investors taking profits on a six-week run of gains that has seen the index add some 9.5 percent since an early-June trough. With most companies yet to report, investors were concerned that the earnings season could prove a fresh negative catalyst for the European equities market, which had been enjoying a brief respite after politicians took some decisive steps to ease the euro zone crisis last month. Miner Rio Tinto dropped 1.7 percent as UBS and Nomura downgraded price targets, updating their forecasts to reflect the recent slump in metal prices. Nokia dropped 3.3 percent, with data from Markit showing short interest in the phone manufacturer has surged to an all-time high ahead of its results due on Thursday. News that the Finnish firm has slashed the U.S. price of its flagship smartphone Lumia 900 in half, in an effort to stanch losses in market share to rivals such as Apple, further fuelled concerns. "Nokia's sales and earnings are on a slippery slope as seen in its lowering of guidance," strategists at Liberum Capital said, adding that the shares - already at 16-year lows - may not fall much further but that it is "difficult to foresee any positive catalyst for the stock before the fourth quarter 2012 at the earliest". With Europe in no position to drive earnings, investors remained on high alert on the health of the global economy, including looking ahead to U.S. June retail sales at 1230 GMT. A weak number would generally be bad for risk assets such as stocks, unless it is seen as sufficiently poor to galvanise the U.S. Federal Reserve into a fresh round of stimulus action. Technical charts also offered some support to equities, with EuroSTOXX 50 holding above support at 2,200 points, despite trading 0.4 percent down on the day at 2,250.88. "We had the 2,200 (support) level, which was defended and now it stands a good chance to ... cross the 10-day moving average and that would generate a new trading buy signal," said Petra Kerssenbrock, technical strategist at Commerzbank in Frankfurt.
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