* FTSEurofirst 300 flat
* Insurer RSA drops 13.4 pct, cuts dividend
* Lufthansa sheds 5.4 pct, suspends dividend
By Tricia Wright
LONDON, Feb 20 European shares traded flat on
Wednesday, consolidating after the previous session's sharp
gains, held back by weak earnings newsflow and as traders cited
caution ahead of the minutes to the U.S. Federal Reserve's
January policy meeting.
The FTSEurofirst 300 traded at 1,171.84 by 0916
GMT, having jumped 1.1 percent on Tuesday fuelled by robust
German sentiment data.
"I see no reason why we can't consolidate the gains and
possibly move higher. I certainly think that central bank policy
is going to remain accommodative," Michael Hewson, analyst at
CMC Markets, said.
"I think the only potential fly in the ointment could be a
slightly more hawkish tone from certain Fed members with respect
to the duration of quantitative easing."
The U.S. Federal Reserve releases the minutes of its Federal
Open Market Committee meeting after market close.
Britain's biggest business insurer RSA was the
standout faller on the FTSEurofirst 300, off 13.4 percent, after
it slashed its 2012 dividend by a fifth and flagged up a further
cut this year.
The news prompted broker Panmure Gordon to downgrade its
rating on the firm, whose dividend has traditionally been among
the highest in the European insurance sector, to "sell" from
"hold", saying it has "removed a key prop to the share price".
Negative dividend newsflow also took its toll on Deutsche
Lufthansa, with the German airline making the decision
to suspend its dividend as it reported full-year results,
sending its shares 5.4 percent lower.
In the current earnings season, 54 percent of STOXX Europe
600 firms have reported quarterly results so far, of
which only 51 percent have beaten or met forecasts, a stark
contrast with Wall Street where 79 percent of S&P 500
companies have reported results, of which 77 percent have beaten
or met consensus, according to Thomson Reuters Starmine data.
Year to date, the STOXX Europe 600 has risen 3.8 percent,
lagging a 7.3 percent advance on the S&P 500.
"European markets have recently underperformed the U.S. but
at the end of the day it won't take much for people to take the
view that it is time to buy the underperformer - and that should
underpin the market," said Lex van Dam, hedge fund manager at
Hampstead Capital, which manages around $500 million assets.