* FTSEurofirst 300 index falls 0.5 percent
* Volatility Index up 6.6 pct, indicates risk aversion
* Royal Bank of Scotland falls after posting losses
By Atul Prakash
LONDON, Feb 27 European equities fell further to
a one-week low in late trading on Thursday, with downbeat
company news combined with political tension in Ukraine
prompting investors to trim their positions in riskier assets.
Cyclical shares lost ground, with autos, insurance
, telecoms and banks falling 0.2 to 1.1
percent. Royal Bank of Scotland slumped 8 percent after
posting a loss, while insurer Allianz fell following
difficulties at its Pimco unit.
Weaker companies dragged down the broader FTSEurofirst 300
index, which had rebounded in February to approach its
highest level since May 2008. The pan-European index was down
0.5 percent to 1,342.06 points by 1522 GMT after falling as much
as 1,334.74, the lowest level in one week.
Investors' risk aversion was highlighted by the Euro STOXX
50 Volatility index, Europe's widely used gauge of
investor sentiment, which gained 6.6 percent.
"The markets had gone ahead of themselves and we may see
investors taking some risk out of the table. Volatility has also
come back to the fore," said Thomas Malloch, investment manager
at Redmayne Bentley.
"Any weakness is likely to be well-bought, as a good amount
of capital is waiting on the sidelines to get invested into the
market, but you need to be careful as valuations of many
companies look stretched at the moment."
Political tensions in Ukraine have added to pessimism about
emerging markets which hit equities in January and has dragged
on the earnings of companies - such as luxury goods groups -
exposed to those regions.
On Thursday, armed men seized the regional government
headquarters and parliament in Ukraine's Crimea peninsula, a day
after Russian President Vladimir Putin ordered military drills
in western Russia near the countries' border.
"We're getting to the tail-end of results season, and many
of the results have not been that great. It's also early days in
Ukraine, but the situation over there is making people nervous,"
said Andrea Williams, European equities fund manager at Royal
London Asset Management.
Some individual stocks were hurt by disappointing company
news. Britain's WPP fell 3.7 percent as fierce
competition in the global advertising industry forced the
company to lower its profit guidance for 2014, wiping more than
a billion pounds off its share price.
Across Europe, Spain's IBEX index fell 1 percent,
while Germany's DAX, which hit a record high of
9,794.05 points in late January, weakened by 1.1 percent to
However, some investors said they were taking advantage of
lower prices to accumulate more stocks.
JNF Capital investment manager Ed Smyth said he was buying
into the DAX at current levels using synthetic exchange-traded
funds (ETFs) as he felt the index would soon recover.
On the positive side, British outsourcing company Capita
rose 6.8 percent after posting a 14 percent rise in
annual profits and saying was confident about its prospects in