* FTSEurofirst 300 down 0.6 pct, EuroSTOXX 50 down 0.9 pct
* EuroSTOXX 50 below 100-day MA support, DAX below 50-day
* Fiat's LatAm weakness underscores EM risks
By Toni Vorobyova
LONDON, Jan 29 European shares fell to six-week
lows on Wednesday, breaking below technical support levels in
the face of weak earnings and concerns that another trimming of
U.S. monetary stimulus may exacerbate the emerging markets rout.
Emerging economies - key revenue sources for Europe's car
makers, fund managers and other companies - have been hit by
financial market turbulence in recent days, triggered by
regional problems and by the prospect of another $10 billion cut
in the U.S. Federal Reserve's bond purchases.
Analysts say the Fed's decision after a monetary policy
meeting, due at 1900 GMT, could expose the weakness in some
emerging countries' finances as foreign cash moves out and local
borrowing costs rise.
That, in turn, would eat into the revenues of global
companies exposed to emerging markets to the detriment of
indexes such as the EuroSTOXX 50, whose constituents make around
a third of their sales in emerging markets.
"If the Fed takes another $10 billion out of QE ... (EM
currencies) will probably end up weakening further," Nick
Xanders, who heads up European equity strategy at BTIG, said.
"For the last three years, investors have thought that
they've put the glass slipper on Cinderella, but actually, when
the QE is taken away, you realise it's the ugly stepsister."
The EuroSTOXX 50 closed down 0.9 percent at 3,011.45 points
, its lowest finish since mid-December.
The move took the index below a key technical support of the
100-day moving average, last at 3,014.08 points, which had acted
as a floor for the market earlier this week.
Among the top regional fallers, the German DAX fell 0.8
percent, slipping below its 50-day moving average.
"Technically, at least in the DAX, we are through support at
9,350, so we have to accept that we are still in a correction
... and the reason might be some further worrying about the
possible Fed decision and the emerging markets too," said Oliver
Roth, head trader at Close Brothers Seydler.
Underscoring the emerging market risks for European
companies, Fiat said results were hit by a slowdown in
Latin America. Shares in the carmaker, which also cut its 2014
trading profit forecast, dropped 4.1 percent, among the top
fallers on the broad FTSEurofirst 300.
Among the other losers, Norwegian aluminium producer Norsk
Hydro fell 4.3 percent after forecasting higher costs,
while Swedish hygiene and paper products maker SCA
shed 5 percent after performance in two key divisions missed
One bright spot came from miners, with Antofagasta
and Anglo American beating production forecasts, sending
their shares up 6.1 and 5.7 percent, respectively.
Analysts, however, questioned whether this trend would
benefit the sector in the medium term.
"There's a huge supply glut on its way in the mining sector,
so you're going to see the words 'record' and 'production' come
out of those companies for some time. But that's only going to
depress the prices of the commodities they're producing," said
Robert Quinn, chief European equity strategist at S&P Capital