* FTSEurofirst 300 index edges up by 0.2 pct
* China deals boost Alcatel Lucent and Total
* H&M slides after profit warning
* Alstom suffers on prospect of U.S. penalty
(Updates with closing prices and no other changes to text)
By Alistair Smout
LONDON, March 27 European equities edged higher
on Thursday, lifted by a rise in telecoms equipment maker
Alcatel and oil group Total which were both
boosted by new Chinese deals.
Alcatel Lucent rose 3.3 percent, making the stock
the best performer in percentage terms on the FTSEurofirst 300,
after it won a one-year contract worth up to 750 million euros
($1 billion) with China Mobile.
French group Total gained 0.8 percent to hit a new high for
2014 after it also won a Chinese deal, part of a series of
agreements struck by leading French companies during a visit to
Paris by Chinese President Xi Jinping.
The gains helped the pan-European FTSEurofirst 300 index
to edge up by 0.2 percent at 1,322.22 points at the
The euro zone's blue-chip Euro STOXX 50 index
also inched up by 0.1 percent to 3,133.75 points.
Weighing on the market was Swedish fashion retailer Hennes &
Mauritz (H&M), which was down 4.3 percent following a
The latest in a string of profit warnings for European
corporates so far this year, the H&M update highlighted the risk
that not all companies would meet market expectations.
"H&M is quite a volatile stock on earnings announcements, so
you can't necessarily read from that company to the wider
market. But we haven't seen many upgrades so far in Europe (in
2014)," said Veronika Pechlaner, who helps manage $13 billion of
assets at Ashburton Investments, adding that stocks may struggle
to rise without strong earnings as valuations look full.
"Earnings delivery is important this year...It will be a
test as we move through the year to see who can actually upgrade
Alstom also fell, down 4.9 percent on the prospect
that the French engineering firm could face hefty penalties from
the U.S. Justice Department in a bribery probe focused on Asia.
Some traders said there were risks that the broader European
equity rally over the past 1-1/2 years could stall on worries
about a possible economic slowdown in China and tensions between
Western powers and Russia over Ukraine.
The FTSEurofirst 300 is around 2 percent off its 5-1/2-year
peak of 1,353.47 points hit in late January, and has experienced
sharp swings up and down over the last two months.
Fabrizio Quirighetti, economist and fund manager at Swiss
bank SYZ, said continuing uncertainty over the economic and
political outlook could create near-term volatility.
However, he expected stock markets to rise in the long term,
helped by an ongoing economic recovery in Europe.
"Even if there is a certain caution surrounding financial
markets at present, equities should continue to be supported by
the positive outlook for developed economies," he said.
Europe bourses in 2014: link.reuters.com/pap87v
Asset performance in 2014: link.reuters.com/gap87v
Today's European research round-up
($1 = 0.7254 euros)
(Additional reporting by Sudip Kar-Gupta,; Editing by Pravin
Char and Angus MacSwan)