* FTSEurofirst 300 flat
* Miners boosted by BoJ easing
* Defensive stocks weaken
By Tricia Wright
LONDON, April 4 European shares were flat on
Thursday, pegged back by more weak economic data which
compounded market concerns over global growth, with analysts
anticipating further range bound trade in the near term.
The euro zone's economic malaise was illustrated by the
publication of Eurozone Services PMI data showing continued
contraction in the sector in March heaping more focus on the
ECB, which concludes its April policy meeting later on Thursday.
Although economists polled by Reuters expect no change in
interest rates, pressure is mounting on the central bank to take
action to kick start the region's economy.
"In domestic Europe I think the macro data is a problem,"
Exane BNP Paribas's head of equity strategy, Ian Richards, said.
"I think unless we see a policy catalyst, or for some reason
we see a restrengthening in that data trajectory... you get the
sense that markets will be slightly more cautious."
The FTSEurofirst 300 was trading at 1,193.64 by
0850 GMT, after a 0.9 percent fall on Wednesday when weak U.S.
data heightened concerns about the global economy's growth
The rally over the last nine months, supported by stimulus
measures from central banks, has seen European shares re-rate on
a price-to-earnings basis of 12.3 times, above the historical
average of 12.19 times, Thomson Reuters Datastream data showed.
The Bank of Japan took surprisingly strong easing steps on
Thursday, with traders saying the move was a boost for the
embattled miners, which have lagged the broader index
this year on concerns over demand.
The euro zone's blue-chip Euro STOXX 50,
meanwhile, firmed 0.7 percent to 2,656.47, having fallen 1.5
percent on Wednesday.
Barclays Capital analyst Lynnden Branigan said the 'inside'
session seen on Wednesday, where trade on the Euro STOXX 50 was
within the prior day's range, highlighted indecision within the
market, and he expected further rangebound trade near-term.
"A few more weeks of sideways chop before we get more
bullish again," he said. Should the index break above the 2,750
area, the top of the recent range, Branigan targets the 2,790
area, the highs from mid-2011.
Defensive stocks, which have led the rally since the turn of
the year in a sign that investors remain unconvinced over the
global economic recovery, fell on Thursday, with their
valuations now looking expensive too.
Healthcare, Food & Beverages and the
technology sectors, which trade on 12-month forward
price-to-earnings of between 18 and 20 times, according to
Thomson Reuters data, were among the top fallers.
"With Europe experiencing a prolonged period of economic
stagnation and negative real interest rates, the love affair of
investors with the Heineken's and Unilever's of this world is
understandable," Ad van Tiggelen, senior investment specialist
at ING Investment Management, said.
"In a zero growth environment, any stock which combines
(dividend) growth with a strong balance sheet, a global
footprint and the ability to borrow money at ultra low yields,
deserves a premium. The question is: how high should that
(Reporting by Tricia Wright, additional reporting by David
Brett and Blaise Robinson/editing by Chris Pizzey, London MPG
Desk, +44 (0)207 542-4441)