* FTSEurofirst 300 down 0.5 pct, Euro STOXX 50 falls 0.8 pct
* HSBC and Munich Re take most points off FTSEurofirst
* Expect more near-term volatility -Schroders fund manager
By Sudip Kar-Gupta
LONDON, Aug 6 European shares fell on Tuesday,
hit by declines in financial heavyweights HSBC and
Munich Re, and some traders predicted more weakness
as investors look to book profits on last month's rally.
The pan-European FTSEurofirst 300 index was down by
0.5 percent at 1,219.49 points in late session trade, breaking a
six-day winning streak. The euro zone's blue-chip Euro STOXX 50
index fell 0.8 percent to 2,788.12 points.
British bank HSBC drew selling for a second consecutive day
after several brokers cut their ratings and price targets on the
stock following disappointing interim results on Monday.
It dropped 1 percent, taking the most points off the
FTSEurofirst 300 and adding to a 4.4 percent decline on Monday
in reaction to the results.
Reinsurer Munich Re tumbled 5.8 percent after its
second-quarter net profits fell more than forecast.
Logic Investments' strategy head Peter Rice said many
investors were selling to book profits on a month-long rally
that saw the FTSEurofirst 300 rise 10 percent from a 2013 low of
1,111.11 points reached in late June.
"I think we will see a bit more profit taking coming in in
future sessions. We've had a good run up and investors are
looking to take money off the table," he said.
Other investors took a more positive view, arguing that
European equities would rise towards the end of the year as the
European economy continues to show signs of emerging from the
blows inflicted by the euro zone's sovereign debt crisis.
Data on Tuesday showed that German industry orders far
exceeded forecasts in June, while Italy's economy shrank less
than expected in the second quarter.
However, Schroders fund manager and global head of macro Bob
Jolly was more cautious, arguing that financial markets would be
volatile as investors prepare for an eventual scaling back in
stimulus measures from the U.S. Federal Reserve.
"We expect market volatility to remain high in the coming
months and have moved to a more cautious stance," said Jolly.