* FTSEurofirst 300 down 0.3 pct, Euro STOXX 50 down 0.3 pct
* Indexes lose steam as big resistance levels loom
* Emerging markets worries weigh on luxury goods makers
* Tensions in Ukraine keep investors on edge
By Blaise Robinson
PARIS, Feb 26 European stocks retreated on
Wednesday, taking a breather from their sharp three-week rally,
with shares in luxury goods makers under renewed pressure due to
their big exposure to emerging markets.
Credit Suisse was also in the spotlight, down 2.8
percent as a U.S. Senate subcommittee alleged new misdeeds by
the Swiss lender.
At 1548 GMT, the FTSEurofirst 300 index of top
European shares was down 0.3 percent at 1,347.64 points,
following a 7 percent rise from a low hit on Feb. 4.
The euro zone's blue-chip Euro STOXX 50 index
was down 0.3 percent, at 3,147.08 points.
The brisk rally - fuelled by a relatively positive earnings
season and signs of a pick-up in economic growth in Europe - has
propelled a number on regional stock indexes to major resistance
levels, with both the UK's FTSE 100 and Germany's DAX
trading within sight of record highs.
"Indexes in Europe are still in a bull trend, and it's very
strong. But there are key resistances to be crossed. Investors
should take advantage of all the dips to buy," Aurel BGC
chartist Gerard Sagnier said.
Shares in luxury goods makers featured among the top losers,
with LVMH down 1.7 percent, Kering down 2
percent and Hermes down 0.8 percent, as traders
pointed to a downbeat note from Credit Suisse analysts who
downgraded the sector to 'benchmark' from 'overweight' citing
the sector's big exposure to China and other emerging markets.
"The risks of structurally slower China growth as well as
the negative impact of China's anti-corruption measures on
high-end spending do not yet seem to be adequately reflected in
consensus expectations for luxury goods sales growth, which, at
12 percent on a 12-month forward basis, is close to the top-end
of its 10-year range," the analysts warned in a note.
Shares in luxury goods makers - which were seen as
safe-havens during the heat of the euro zone debt crisis due to
their strong exposure to emerging markets - have fallen out of
favour among fund managers in the past few months, hurt by
doubts about the pace of growth in emerging markets.
LVMH stock is down 10 percent since mid-September, while
both Hermes and Kering are down 15 percent over the same period,
strongly underperforming a 7 percent rise in the FTSEurofirst
French telecoms stocks also dropped on Wednesday as a price
war between the country's operators heated up with Bouygues
Telecom unveiling a cut-price bundle offer. Iliad
sank 4.4 percent and Orange fell 3.1
Around Europe, UK's FTSE 100 index fell 0.3 percent,
Germany's DAX index slipped 0.4 percent, and France's
CAC 40 shed 0.5 percent.
Investors were also kept on edge by tensions in Ukraine,
with volatile trading late in the European
Europe bourses in 2014:
Asset performance in 2014:
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