* FTSEurofirst 300 index falls 0.1 percent
* Retail sector down after poor company updates
* Charts point to gains in the near-term
By Atul Prakash
LONDON, Jan 16 European equities edged lower early on Thursday after climbing to a 5-1/2-year high in the previous session, with poor sales number from Dutch grocer Ahold and a cautious outlook from Dixons hurting retailers.
The STOXX Europe 600 retail index fell 0.7 percent, the top decliner. Ahold fell 3.7 percent on a steeper than expected fall in fourth-quarter sales and Dixons, Europe's No. 2 electricals retailer, dropped 3 percent after cautioning on growth.
British online grocer Ocado fell 2.5 percent despite posting a 21.3 percent growth in gross sales, with its Chief Executive Tim Steiner saying the retail environment remained both challenging and competitive, with consumer sentiment subdued.
"The retail sector is under pressure due to some disappointing comments on the sector. It is clear that the austerity in the euro zone has hurt the sector," Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets in Brussels, said.
"However, as the economy is on the mend and we are likely to see some decent growth in the world economy, things should pick up in 2014."
Weaker retail stocks put some pressure on the pan-European FTSEurofirst 300 index, which fell 0.1 percent to 1,338.34 points by 0856 GMT after climbing 1 percent to a 5-1/2-year high in the previous session on encouraging U.S. data and some positive company results.
The euro zone's blue-chip Euro STOXX 50 index fell 0.2 percent to 3,161.98 points, but charts suggested that recent price action had been positive for the index and it was poised to rise again in the near-term before retreating.
"The index is showing a bullish consolidation pattern, suggesting an upside potential of 90 points. The trend is definitely up and I am looking for a rally to around 3,200-3,220 in the near term," Roelof-Jan van den Akker, senior technical analyst at ING Commercial Banking, said.
"After testing the 3,200-3,220 area, we could see some pullback from where prices might rally towards the next strong horizontal resistance at 3,445."
Among other movers, Aberdeen Asset Management fell 4 percent, the top FTSEurofirst faller, after it said clients withdrew a net 4.4 billion pounds ($7.19 billion) in the last three months of 2013.