* FTSEurofirst 300 closes 0.7 pct lower
* Charts signal more losses for equities
* Swedbank falls as earnings disappoint
By Atul Prakash
LONDON, July 16 European shares retreated from
six-week highs on Tuesday, as concern about the earnings outlook
prompted some investors to book profits, with Swedbank
hit after its results lagged market forecasts.
The Swedish bank dropped 3.9 percent after it posted a fall
in second-quarter earnings and said margins could be weaker in
the coming months as a result of increased competition in the
country's mortgage market.
The FTSEurofirst 300 index of top European shares
ended 0.7 percent lower at 1,191.15 points. The index is up more
than 8 percent from an early June low.
"Recent price gains have prompted some investors to book
profits. People are also cautious because of concerns that the
second-quarter earnings season might disappoint," Christian
Stocker, equity strategist at UniCredit in Munich, said.
"I see European equities flat to down in the coming weeks.
The DAX could fall to 7,600 points by mid-August," Stocker said,
referring to Germany's benchmark index, which fell 0.4
percent to 8,201.05 following poor sentiment data.
The German ZEW economic think tank's monthly poll of
economic sentiment unexpectedly fell to 36.3 from 38.5 in June,
against expectations of a rise to 39.6.
Stocker said he was "underweight" European autos as earnings
expectations for the sector were too high. New car registration
figures showed the second quarter was quite bad for automakers
and that will get reflected in the earnings numbers, he added.
Figures showed European car sales slumped to their lowest in
20 years in the first half of 2013.
Charts suggested further weakness for the Euro STOXX 50
index, which fell 0.8 percent to 2,665.61 points.
Michael Riesner, head of equities technical analysis at UBS,
said the recent bounce of the Euro Stoxx 50 was in a maturing
phase and a daily close below 2,666 might create a tactical
"We currently do not have signals suggesting an overshooting
in European equities, which continue to underperform the U.S.
indices," he said.
Murray Gunn, HSBC's head of technical analysis, said the
Euro STOXX 50 had a bearish Elliott Wave structure and a fall
through 2,539 would be the first sign that a third wave moving
lower was under way. The Elliott Wave theory says prices follow
a pattern of three waves up and five waves down.
Among other sharp movers, the media sector fell 1.5
percent, led lower by SES, one of the world's largest
commercial satellite operators. SES fell 1.4 percent following a
bearish Morgan Stanley note that said overcapacity could be a
more serious issue than the industry was expecting.