* FTSEurofirst 300 down 0.1 pct, Euro STOXX 50 down 0.03 pct
* About 2.2 bln euros wiped off Deutsche Bank's market cap
* Banks still Europe's best sector in 2014, up 5.5 pct
* Peugeot sags 11 pct on details over looming capital hike
* Further brisk inflows going into European equities -EPFR
By Blaise Robinson
PARIS, Jan 20 European stocks inched lower in
thin trade on Monday, slipping from 5 1/2-year highs as Deutsche
Bank's surprise quarterly loss prompted investors to
cash in recent gains on banking stocks.
Shares in Germany's biggest lender, which had not been due
to release results until Jan. 29, sank 5.4 percent, wiping about
2.2 billion euros ($3 billion) off its market capitalisation.
The bank announced a drop in fixed-income trading revenues
and heavy litigation and restructuring costs, which prompted it
to warn about a challenging 2014.
Commerzbank fell 4.5 percent, Banco Popolare
dropped 3.1 percent and Credit Suisse shed
"The figures of Deutsche Bank are surprising and there's no
end to be seen, and therefore we are kind of critical about the
conditions of the banking sector," said Oliver Roth, head trader
at Close Brothers Seydler. "I think we have seen the bottom of
the crisis, but I don't see the end of the crisis. Therefore I
see much more potential in other sectors than banks."
Despite the day's sell-off in among banks, the STOXX bank
index is still up 5.5 percent in 2014, Europe's best
sector performance so far this year.
The FTSEurofirst 300 index of top European shares
ended 0.1 percent lower at 1,344.17 points. The euro zone's
blue-chip Euro STOXX 50 index ended down 0.03
percent at 3,153.17.
Trading volumes were light with U.S. markets closed for a
Struggling French carmaker PSA Peugeot Citroen
also figured among the top losers on Monday, sinking 11 percent
after a source told Reuters the group's board has approved a
dilutive 3 billion-euro capital increase, with China's Dongfeng
Motor Co. and the French government taking a
Shares in the struggling automaker are among the most
shorted across Europe, with 16.7 percent of the company's shares
out on loan, according to data from Markit.
Odey Asset Management LLP and D.E. Shaw are among the hedge
funds with the biggest short positions on Peugeot, according to
recent filings with French regulator AMF.
Around Europe, UK's FTSE 100 index gained 0.1
percent, Germany's DAX index lost 0.3 percent, and
France's CAC 40 fell 0.1 percent.
European stocks have rallied since last June as a pick-up in
the region's macro indicators and a more dovish European Central
Bank prompted investors to scoop up European shares. That has
led to into massive investment inflows to the region.
Europe equity funds absorbed over $4 billion in net
investment inflows in the seven-day period to Jan. 15, according
to the latest data from EPFR Global. It was their fourth-biggest
weekly total on record.
The brisk inflows into Europe equity funds represented
nearly half the collective flows into all equity funds around
the world, according to EPFR.
"The market has risen on hopes of a durable turnaround in
growth for the euro zone. Recent data has signalled such trends
for the U.S. and UK economies, but for the euro zone, it's been
mostly optimistic forecasts, not real macro data," FXCM analyst
Vincent Ganne said.
"Thursday's PMI for France, Germany and the euro zone should
shed some light, with the focus on France, where data has been
Europe indexes in 2014: