UPDATE 1-European Factors to Watch-Ukraine tension to peg back shares after rally

Thu Feb 27, 2014 2:30am EST

LONDON Feb 27 (Reuters) - European equity futures edged lower on Thursday, with traders pointing to escalating political tensions in Ukraine as being likely to peg back the region's stock markets which had rallied in February to near record highs.

The euro zone's blue-chip Euro STOXX 50 futures contract and the German DAX futures contract both fell 0.2 percent by 0720 GMT, while France's CAC futures contract was flat. German bund futures opened 18 ticks higher.

Russian President Vladimir Putin on Wednesday ordered drills by his armed forces to test combat readiness in western Russia, near the border with Ukraine, prompting the United States to warn that a military intervention would be a "grave mistake."

On Thursday, Interfax news agency reported that armed men had seized the regional government headquarters and parliament on Ukraine's Crimea peninsula.

"There is some nervousness about the tensions in Ukraine," said Darren Courtney-Cook, head of trading at Central Markets Investment Management.

"If the DAX futures hold below 9,700, we could be in for further downside," he added.

The blue-chip pan-European FTSEurofirst 300 index fell 0.2 percent to 1,348.75 points on Wednesday, easing back after a 7 percent rise from a low hit on Feb. 4.

The FTSEurofirst 300 remains close to its highest level since May 2008, while Britain's FTSE 100 and the DAX are also within sight of record highs. The FTSEurofirst 300 is up by nearly 3 percent since the start of 2014, having risen 16 percent in 2013.

Europe bourses in 2014:

Asset performance in 2014:------------------------------------------------------------------------------ > GLOBAL MARKETS-Asian shares soft as Ukraine dampens risk sentiment

> US STOCKS-S&P 500 ends near flat; retailers fly for a second day > Nikkei falls for 2nd day as Ukraine tensions sour sentiment > TREASURIES-Prices rise, demand strong at five-year auction > FOREX-Dollar near 2-week high as geopolitical tensions heat up > PRECIOUS-Gold off 4-month high; premiums slip in Singapore, Tokyo > METALS-London copper slips to 12-week low on China worries > Brent eases towards $109 on demand worries; supply fears support

COMPANY NEWS:

AHOLD :

Dutch supermarket group Ahold said it was cautious about the year ahead after its operating margin in the fourth quarter contracted compared to the previous year.

ALLIANZ :

Allianz raised its dividend by almost a fifth after fourth-quarter net profit met expectations at 1.26 billion euros ($1.72 billion), as a strong operating gain in property and casualty insurance offset declines elsewhere.

CGG VERITAS :

French oil industry seismic surveying firm CGG booked an $800 million impairment in its data acquisition division as it posted a 10 percent rise in 2013 sales on Thursday, less than its previously lowered target.

ESSILOR :

Essilor, the world's largest maker of ophthalmic lenses, said on Thursday it was aiming for 10 to 12 percent sales growth at constant exchange rates this year after it posted weaker-than-expected 2013 results.

HOCHTIEF :

German construction company Hochtief forecast a bigger-than-expected rise in profits this year as cost cuts bear fruit.

MOBISTAR :

Belgian mobile phone operator Mobistar forecast a further fall in core profits for 2014 of up to a quarter, as the group made provisions for regulatory caps on mobile phone rates and a tax on mobile phone masts in the south of Belgium.

ROYAL BANK OF SCOTLAND :

Part-nationalised Royal Bank of Scotland said it would refocus on serving British customers after reporting an 8.2 billion pound ($13.64 billion) loss for 2013, hit by restructuring costs and misconduct charges.

TELEFONICA :

Spanish telecoms group Telefonica said on Thursday its full-year revenues fell 8.5 percent in 2013 to 57.06 billion euros ($77.98 billion), hit by weaker currencies in Latin America although it beat a Reuters forecast for 56.99 billion euros.

VEOLIA :

French water and waste group Veolia Environnement said it booked a 135 million euro ($184.5 million) net loss in 2013, reversing a 404 million profit in 2012, partly due to goodwill impairment charges on its German unit.

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