European shares retreat, bruised by U.S. data

LONDON, March 15 Fri Mar 15, 2013 12:40pm EDT

LONDON, March 15 (Reuters) - European equities retreated from 4-1/2-year peaks on Friday, with weak U.S. data prompting investors to lock in profits for the weekend and with the March options expiry leaving the market less protected against a fall.

U.S. consumer sentiment sank its lowest over a year, while inflation picked up, the data showed, casting doubts over the strength of the world's biggest economy, hopes of a recovery in which had supported recent global equity gains.

For the European stock market, which is on track for its 10th month of gains despite a struggling domestic economy and falling corporate earnings, that was enough to prompt a round of profit taking.

"What's dragging on it today? May be the U.S. data, the weaker consumer confidence," said James Butterfill, global equity strategists at Coutts, although he did not rule out the possibility of more gains in the near term.

"(Central bank stimulus) in the U.S. and Japan is quite a back-stop in terms of any significant downside but saying that we are cautious on most equity markets at the moment ... If you are concerned that markets are looking quite toppy then you could look more for dividend plays. What we are doing in portfolios is not adding to positions."

The FTSEurofirst 300 provisionally closed down 0.4 percent at 1,202.65 points, retreating from a fresh 4-1/2-year high set at the start of the session.

The EuroSTOXX 50 fell 0.7 percent, with the move accentuated by the expiry of a large number of put options.

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