* FTSEurofirst 300 index steadies
* Retails knocked by poor earnings
* Miners led higher by Rio update
* Charts suggest 90-point gain for Euro STOXX 50
By Atul Prakash
LONDON, Jan 16 European equities edged lower to
steady just below a 5-1/2-year high on Thursday, hit by a string
of losses in the retail sector after corporate reports but
receiving support from miners.
The retail index fell 0.9 percent, hit by company
updates from the likes of Carrefour, the world's
second biggest retailer, which dropped 3.7 percent after
disappointing sales figures.
Dutch retailer Ahold, Dixons and Primark
owner AB Foods all dropped after earnings updates.
The retail sector gained 20 percent in 2013, but many high
street names have struggled during the important festive trading
"Over the last year, retail stocks really have rallied, and
now the sector does look quite expensive. That leaves
expectations quite high, and we've highlighted the potential for
retail to surprise to the downside this earnings season," Dennis
Jose, European equity strategist at Barclays, said.
At 1544 GMT, the pan-European FTSEurofirst 300 index
was down 0.1 percent at 1,338.85 points, having climbed
1 percent to a 5-1/2-year high on Wednesday on U.S. data and
strong results from companies such as Bank of America.
Wednesday's gain took the index solidly out of the range
that it had traded in since the start of the year, and it is
still up 1.7 percent for 2014.
"The risk of a consolidation is certainly there, as we've
had a pretty good run. If we do get a correction... we'd be
looking at it as a buying opportunity," Barclays' Jose said.
The STOXX Europe 600 basic resources index rose 2.7
percent to the top of the sectoral gainers' list. A sharp rise
in output helped Rio Tinto rise 2.7 percent and research
notes helped BHP Billiton and Polymetal
advance 3.8 percent and 5.5 percent.
A Citigroup note said it changed its 12-month sector stance
to "bullish" from "neutral" to reflect better fundamentals,
naming BHP and Rio among its key picks. Polymetal was helped by
an upgrade from UBS to "buy" from "neutral".
Charts also suggested that recent price action had been
positive for the market and that the euro zone's blue-chip Euro
STOXX 50 index was poised to rise again in the near
term. The index was down 0.5 percent at 3,154.33 points after
hitting a new five-year high earlier in the session.
"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.