* FTSEurofirst 300 down 0.2 percent
* RWE weakens on dividend cut
* Adidas drops on profit warning
* Europe stocks see 3rd best weekly inflow on record -Lipper
By Tricia Wright
LONDON, Sept 20 European shares retreated on
Friday after the boost from the U.S. Federal Reserve's decision
to keep its stimulus programme in place for now wore off.
The FTSEurofirst 300 was down 0.2 percent at
1,263.04 points by 1455 GMT, having hit its highest level since
mid-2008 in the previous session. It did, however, notch up its
third straight week of gains.
The euro zone's blue-chip Euro STOXX 50 was down
0.3 percent at 2,928.48 points.
Germany's No. 2 utility RWE AG was among the
biggest losers across Europe, down 3.8 percent, after it slashed
Adidas also came under pressure, dropping 2.9
percent after the German sports apparel maker warned on its 2013
Equity markets took a leg down on Friday after St. Louis
Federal Reserve President James Bullard told Bloomberg
television that a slowing of asset-purchases in October was
possible depending on incoming data.
But analysts say that while a lack of clarity over when U.S.
stimulus will be scaled back could unleash volatility into the
markets, they remain bullish on European equities given
improvements in the global growth picture.
"The end result of everything that (the Fed has) achieved is
just to introduce an added source of uncertainty... We are
scrambling to put months to the eventual introduction of
tapering," Ian Richards, head of equity strategy at Exane BNP
"I think yesterday's sugar rush was misplaced but ultimately
I don't think this materially changes the investment case."
Flows into European equities from U.S.-based funds
accelerated in the week ended Sept. 18, according to Lipper
data, with the region's stocks enjoying their third-biggest
weekly net inflows since Lipper started to track the data in
"I wouldn't expect that the asset reallocation and the fund
flows which have increasingly focused on Europe will retrace or
diminish over the coming months," Richards said.
Some technical analysts anticipate some short-term
consolidation on the Euro STOXX 50 as it bridges a gap made on
Thursday, but from there expect the index to resume the rally
which has seen it jump 7.5 percent from late August lows.
Barclays Capital technical analyst Lynnden Branigan reckons
the index could drift towards 2,909, the bottom of the gap, in
the coming days, but if it follows this with a higher close,
there is "room for that trend to extend to the upside".
His immediate target is around 2,955, Thursday's high, and
longer term at the May 2011 highs at about 3,000.