Cyclical shares lag bounce in European bourses on Ukraine worry
(Updates at settle)
* FTSEurofirst 300, Euro STOXX 50 up 0.5 pct
* Indexes breaks losing streak on U.S. data, Citi results
* Ukraine crisis caps sentiment
* Shares dependent on economic growth hit on valuation worry
By Francesco Canepa
LONDON, April 14 (Reuters) - Strong U.S. economic data helped pan-European equity indexes snap a three-day losing streak on Monday but appetite for risk remained muted as the threat of violence between Ukrainian forces and pro-Russia separatists loomed.
Cyclical shares lagged broader indexes as tension in Ukraine and volatile global markets prompted investors to take a more cautious stance and cash in on some of the best performers of the past nine months.
Sectors which depend the most on economic activity, such as travel and leisure, tech and financial services fell between 1 percent and 1.2 percent, underperforming small advances on pan-European indexes.
The three sectors rose between 15 and 30 percent in the past year, leaving them trading at hefty premiums to their 10-year average price-to-earnings multiple at a time of falling profit estimates, Datastream data showed.
The broader market was propped up by a rise in sectors where earnings are less exposed to fluctuations in the economic cycle, such as food and beverages, which was up 1 percent.
"With earnings forecasts now looking not so good for 2014, people are looking at valuations," said Tom Elliott, international investment strategist at deVere Group.
"That favours defensives over cyclicals."
Tech stocks, in particular, are the most expensive in Europe, trading at around 19 times their 12-month forward earnings, against a 10-year average of about 16 times and the STOXX 600's price-earnings ratio of 14.
Smaller biotech names such as Cellectis and Genfit, shares in which more than doubled in value since the start of the year, fell around 12 percent each.
Among other sharp movers, Greece's largest lender, National Bank, also fell 12 percent, making it the biggest decliner on the FTSEurofirst 300 on speculation the bank might launch a share offering to plug a capital shortfall.
The pan-European FTSEurofirst 300 index ended three days of falls to close 0.5 percent higher at 1,319.46 points, having erased early losses after strong results from U.S. bank Citigroup and better-than-expected U.S. retail sales data.
The euro zone's blue chip Euro STOXX 50 index also rose 0.5 percent, to 3,131.57 points.
The index fell 3.5 percent last week and analysts said the trouble in Ukraine could prevent it bouncing back any time soon.
"Geopolitical concerns are putting pressure on equities," said Christian Stocker, an equity strategist at UniCredit in Munich. "Markets fear an escalation in tension will result in more economic sanctions on Russia and that will have a negative repercussion on Europe."
Several firms exposed to Russia fell. Finnish tyre maker Nokian Renkaat, Austrian lender Raiffeisen Bank International and Belgian financial group KBC lost from 1.3 to 2.6 percent.
Charts also showed further losses were likely.
"Although the slope of the 200-day moving average remains up at this juncture, the Euro STOXX 50 index has turned down from the up-channel resistance line stretching back to 2011 and the move below support around 3,150 is another worry for bulls," said Murray Gunn, the head of technical analysis at HSBC.
The index could find support around 2,971 points. On the upside, 3,196 is considered a strong resistance level. (Additional reporting by Atul Prakash in London and Blaise Robinson in Paris; Editing by Alison Williams)
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