* FTSEurofirst 300 down 0.1 pct
* Carlsberg warns of deteriorating conditions in Russia
* Heineken surges after forecast-beating results
* Luxottica weakens on reports CEO to step down
By Tricia Wright and Blaise Robinson
LONDON/PARIS Aug 20 European shares dipped on
Wednesday, ending a two-day rally, with investors rattled by
Carlsberg warning that profits would fall this year
due to deteriorating conditions in Russia.
Shares in the Danish brewer fell 2.8 percent. It derives 35
percent of its profits from Russia, making it a test case of how
European companies will be affected by tit-for-tat sanctions
between the West and Russia over the conflict in Ukraine.
Shares in rival Heineken, however, surged 7.8
percent after the brewer posted better-than-expected first-half
operating profit, as it sped up cost savings and grew volumes in
all regions bar Central and Eastern Europe.
Investors were wary about equities, hit in the last few
weeks by fears of an escalation in the Ukrainian crisis which
has revealed new vulnerabilities in Europe's stumbling economy.
The violence in Ukraine and sanctions against Russia, a
major energy supplier to Europe, have muddied the forecasts of a
number of multinationals including Henkel, Adidas
"It (Carlsberg's warning) basically feeds into the narrative
that for all the optimism about the recent bounce-back in the
markets the same underlying problems remain," CMC Markets chief
market analyst Michael Hewson said.
"Central bank accommodation can only get you so far and the
likelihood is that the Bank of England and the Fed are looking
to end their support for the economy, or start to edge interest
rates up," he said.
Bank of England minutes showed two policymakers voted for an
interest rate hike in August. Some in the market had expected
only one member of the bank's Monetary Policy Committee to do so
and the news prompted the market to bring forward expectations
for a first UK interest rate rise to five months' time.
The U.S. Federal Reserve is set to release minutes from its
July 29-30 policy meeting at 1800 GMT. The minutes may shed
further light on how the bank plans to eventually exit from its
extraordinary monetary stimulus, and could also show whether
there is a growing divide over when to raise interest rates.
At 1116 GMT, the FTSEurofirst 300 index of top
European shares was down 0.1 percent at 1,345.16 points, after
gaining 1.8 percent in the past two sessions.
The euro zone's blue-chip Euro STOXX 50 index
fell 0.3 percent to 3,080.50 points.
"The recent rebound from the June-August drop should help
European indexes retrace about 50 percent of the pullback, but
beyond that, the upside potential is quite limited. Indexes are
stuck in a range," Aurel BGC analyst Gerard Sagnier said.
The FTSEurofirst 300 - which had tumbled 7 percent
between late June and early August - has recovered nearly half
of the slide, with the index testing the 50 percent Fibonacci
retracement level on Wednesday, at 1,348.11 points.
Shares in Luxottica, the world's largest eyewear
maker by revenue, shed 2.8 percent on newspaper reports that CEO
Andrea Guerra may step down over differences of opinion with
founder and chairman Leonardo Del Vecchio. Luxottica declined to
Guerra, widely seen as a driving force behind Luxottica's
success in recent years, has been CEO since 2004.
Europe bourses in 2014: link.reuters.com/pap87v
Asset performance in 2014: link.reuters.com/gap87v
Today's European research round-up
(Editing by Louise Ireland)