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* FTSEurofirst 300 index falls 0.3 percent
* Poor earnings outlook hurts sentiment
* Index seen range-bound, uptrend intact
By Atul Prakash
LONDON, Oct 12 (Reuters) - European shares fell onn Friday morning and looked set to end the week in negative territory but analysts said the market was not likely to witness a sharp sell-off.
Traders said they are still concerned over the quality of third quarter earnings reports and Spain's hesitance to seek a bailout.
The FTSEurofirst 300 index has been hovering in a band of about 50 points in the past two months, against around 100 points in June and July. At 0838 GMT, the index was down 0.3 percent at 1,095.73 points.
"It's not going to be a great earnings season but there are good reasons not to be too worried about it. I think disappointments will be contained to some degree on the basis that labour costs have been falling and expectations have been lowered quite considerably," Graham Bishop, senior equity strategist at Exane BNP Paribas, said.
"We think valuations are supportive. We are sticking to our pro-cyclical bias," he said, adding the market was in a holding pattern after a good summer run and was looking for catalysts such as more clarity on the U.S. "fiscal cliff" of spending cuts and tax rises to break the current trading range.
The earnings season started this week in the United States, with firms like Chevron and Alcoa disappointing investors. Alcoa posted a quarterly loss and cut its outlook for global aluminum demand, citing a slowdown in China. European earnings releases will pick up in the last week of October.
Shares in European industrial companies fell on concerns about economic outlook and demand for their goods and services. The sector index fell 0.8 percent, followed by technology shares, down 0.7 percent.
Investors have also been trading cautiously following Spain's hesitation to apply for a bailout that would pave the way for an intervention by the European Central Bank.
The euro zone's blue chip Euro STOXX fell 0.1 percent to 2,483.94 points. Charts showed the index had potential to bounce back.
"The uptrend, which has been in place since early June, is intact and the bias is still to the upside, but the key level to watch on the upside is 2,600," Tim Parker, technical analyst at Westhouse Securities, said.
The market tried to break the 2,600 level twice this year but failed. Parker said that if the index managed to cross the level, then that would be a very bullish signal and the next target would be 3,000.
Deutsche Bank strategists advised in a note to buy European financials, highly-leveraged high yield and domestic exposure saying: "Now's the time". They said they were returning to being tactically 'overweight' on the broader STOXX 600 index.
Shares in AkzoNobel fell more than 4 percent to an 11-week low as the Dutch paints maker's Chief Executive Ton Buechner was still on medical leave, dashing analysts' hopes for a quick turnaround at the company.