* FTSEurofirst 300 down 0.4 percent
* Inditex and Kabel Deutschland among top gainers
* Germany's DAX, Britain's FTSE near support levels
By Tricia Wright
LONDON, June 12 European shares fell on
Wednesday, pressured by autos and banks, as concerns over Greek
politics pushed regional indexes nearer to key support levels
which, if breached, could trigger further losses.
The FTSEurofirst 300 closed down 0.4 percent at
1,174.79 points, extending weakness from the previous session
when concerns that global central banks were looking to scale
back their stimulus knocked the index 1.2 percent to six-week
Many investors were sticking to the sidelines, evidenced by
light trade at 88 percent of the 90-day daily average, with the
stimulus worries compounded by a revival of euro zone fears
after the shutdown of the Greek state broadcaster caused
tensions in the fragile three-party government.
CMC Markets analyst Michael Hewson said he would be wary of
April's low of 6,214 on Britain's FTSE 100, and of the
8,100 points area on Germany's DAX, which are within
sight of current levels.
"I would be cautiously long while above these levels - but
the fact that there is this debate about the longevity of
central bank stimulus means there is potential for a test of
these supports," he said. "If they give way (we) could (see)
Cyclical auto stocks and banks were among
the biggest laggards on Wednesday, nursing respective falls of 2
percent and 1.1 percent, while defensive areas such as
healthcare and food & beverages bucked the weak
"I think the risks are to the downside," said Pieter Fourie,
head of global equities at Sanlam Private Investments (UK) Ltd,
who does not believe in buying European cyclical stocks, despite
the fact some are looking cheap after recent underperformance.
Sanlam Private Investments has used the recent market
weakness to buy into "high-quality" blue-chip names such as
brewer Anheuser-Busch InBev, food group Nestle
and luxury group LVMH.
The trio trade on respective 12-month forward price/earnings
ratios of 19.33 times, 17.80 times, and 17.42 times, according
to Thomson Reuters data, against the STOXX 600 on 12.1
There were some bright spots on Wednesday. Clothing retailer
Inditex rose 3.5 percent after it reassured over its
margin guidance, while media group Kabel Deutschland
soared 8.2 percent on the back of a preliminary bid approach
from telecoms firm Vodafone.
Some investors were relatively sanguine on the prospects for
equities, with the FTSEurofirst 300 only 6.5 percent shy of
five-year highs hit towards the end of May, leaving it up 3.6
percent in 2013.
"What we hope is that equity markets, after suffering this
bout of volatility, calm down and we can see more fundamental
drivers around earnings, around sales, around margins, come
through, and that will be reflected in equity prices," said
Shaniel Ramjee, an investment manager at Baring Asset
Management, which has 39.5 billion pounds ($62 billion) of
assets under management.