European shares dip from multi-year highs

PARIS Thu May 9, 2013 3:10am EDT

PARIS May 9 (Reuters) - European shares fell in early trade on Thursday, halting a sharp three-week rally to multi-year highs, with pharmaceutical stocks trimming recent lofty gains.

GlaxoSmithKline and AstraZeneca were both down 0.5 percent. The sector has surged more than 20 percent over the past six months.

At 0706 GMT, the FTSEurofirst 300 index of top European shares was down 0.2 percent at 1,226.86 points, slipping from a near five-year high hit on Wednesday, while the euro zone's blue chip Euro STOXX 50 index was down 0.6 percent at 2,768.81 points, retreating from a near two-year high.

Technical momentum indicators have been signalling that the two benchmark indexes were ripe for a retreat.

"We're seeing excessive optimism, with more and more retail investors turning bullish, which is never a good sign," said Guillaume Dumans, co-ahead of 2Bremans, a Paris-based research firm using behavioural finance to monitor investor sentiment.

"The signal we get from our indicator is contrarian, so we expect a pull-pack today."

Bucking the trend, Spanish oil group Repsol rose 1.5 percent, lifted by results showing a forecast-beating 47 percent jump in adjusted net profit.

A couple walks along the rough surf during sunset at Oahu's North Shore, December 26, 2013. REUTERS/Kevin Lamarque

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