* FTSEurofirst 300 down 0.1 pct
* Carlsberg warns of deteriorating conditions in Russia
* Heineken surges after forecast-beating results
* Luxottica falls on reports CEO to step down
* Infineon weak; poised to buy U.S. chipmaker - source
By Tricia Wright
LONDON, Aug 20 European shares dipped on
Wednesday, ending a two-day rally, with investors rattled by
Carlsberg's warning that profits would fall this year
due to deteriorating conditions in Russia.
Further souring the market mood was the spectre of a major
central bank raising interest rates as soon as at the start of
next year after Bank of England minutes showed two of the bank's
nine rate-setting policymakers voted for a hike this month.
The U.S. Federal Reserve is set to release minutes from its
July 29-30 policy meeting at 1800 GMT which could give insight
on its outlook for interest rates.
Shares in Carlsberg fell 3.6 percent. The Danish brewer
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
Shares in rival Heineken, however, surged 7.7
percent after it posted better-than-expected first-half
operating profit, as it sped up cost savings and increased
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
"I think (Ukraine-Russia) does provide a deep-seated concern
in that it is a seemingly intractable problem for both sides and
it does now have serious economic consequences ... The recovery
may in some regions actually be reaching a point where it's
going to slow down in the foreseeable future," said Ros Price,
chief investment strategist at Seven Investment Management.
"There is a lot of opportunity (within equities) but there
is a lot of downside risk." Price would look to back firms which
export to Asia and China where growth appears to be picking up.
At 1450 GMT, the FTSEurofirst 300 index of top
European shares was down 0.1 percent at 1,345.09 points, after
gaining 1.8 percent in the past two sessions.
Stocks had been helped earlier this week by strong U.S.
housing data and soft UK inflation figures.
The euro zone's blue-chip Euro STOXX 50 index
fell 0.3 percent to 3,081.09 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.
Luxottica, the world's largest eyewear maker by
revenue, shed 3.4 percent on reports that CEO Andrea Guerra may
step down over differences of opinion with founder and chairman
Leonardo Del Vecchio.
Luxottica declined to address Guerra's future. Guerra,
widely seen as a driving force behind Luxottica's success in
recent years, has been CEO since 2004.
Meanwhile, Germany's Infineon is poised to buy a
U.S.-based semiconductor company for about $2 billion, a person
close to the deal told Reuters. Its shares fell 1.5 percent.
Bloomberg earlier cited people familiar with the matter as
saying a deal could be announced later on Wednesday.
Europe bourses in 2014: link.reuters.com/pap87v
Asset performance in 2014: link.reuters.com/gap87v
Today's European research round-up
(Additional reporting by Blaise Robinson; Editing by Susan