European shares edge lower, on track for worst week since June
* FTSEurofirst 300, STOXX 600 Europe both down 0.3 pct
* L'Oreal, Hermes rally after results
* Oil stocks fall back as angst about Middle East supply eases
By Francesco Canepa
LONDON, Aug 30 (Reuters) - European shares edged lower on Friday, setting them on course for their worst weekly loss since June, as a rally in France's L'Oreal and Hermes after their first-half results was offset by losses in oil stocks.
Oil stocks drifted lower after concerns that imminent strikes against Syria would hurt supply eased due to the British parliament's rejection of a motion supporting military action, but the continued threat subdued stock markets.
Cosmetics maker L'Oreal and luxury group Hermes both posted profits that beat brokers' expectations and the former was also boosted by a report suggesting it was ready to buy out Nestle's 29.5 percent stake next year.
They were among the top risers on the pan-European FTSEurofirst 300 index, which was down 0.3 percent at 1,203.94. The broader STOXX Europe 600 was also down 0.3 percent, to 299.40 points.
The STOXX 600 was broadly flat on the month but it was still on course for a 1.7 percent loss for the week.
The STOXX 600 has pulled back 3 percent from its mid-August high as investors positioned for an imminent reduction in U.S. monetary stimulus, which has helped the market rally around 30 percent since June 2012.
"Syria will continue to drive markets up and down for quite a while, but there will be also a question whether the Fed will start to taper its injection," said Yann Belvisi, an analyst at CM-CIC in Paris.
"The rally will resume but first we see a period of volatility that will last at least until the end of September."
Belvisi expected the STOXX 600 to rise to between 325 and 330 points next year to trade at 13 times its expected earnings for the following 12 months, compared to 12.6 currently. He added any fall in the price-to-earnings multiple to 12 would represent a very attractive entry point.
Curbing market gains on Friday were oil stocks, down 0.8 percent. The sector gave back nearly half of its weekly gains as crude prices fell from a recent peak.
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