* FTSEurofirst 300 dips 0.2 pct, Germany's DAX down 0.5 pct
* DAX further underperforms rest of Europe's stock indexes
* Sanctions against Russia so far seen as "soft"
By Blaise Robinson
PARIS, March 18 European stocks dipped on
Tuesday, trimming the previous session's gains as tensions in
Ukraine following the weekend referendum in Crimea kept
investors on edge.
Germany's DAX index - seen as the most vulnerable
to the crisis between Russia and the West over the future of
Crimea - underperformed again, and was down 0.5 percent, with
Siemens falling 1 percent and Henkel down
Data out on Tuesday showed German analyst and investor
sentiment fell much more than expected in March, hitting its
lowest level since August 2013, knocked by fears the crisis in
Ukraine could weigh heavily on Europe's largest economy.
The Mannheim-based ZEW economic think-tank's monthly poll of
economic sentiment dropped to 46.6 from 55.7 in February,
falling short of even the lowest forecast of 49.9 in a Reuters
poll of analysts. The consensus forecast was for 53.0.
The DAX is down 4.4 percent since the start of the year, the
weakest showing among Europe's main stock indexes, and strongly
underperforming a 10 percent rally in 2014 in Italy's FTSE MIB
index, as investors have increasingly bet on the euro
zone peripheral countries' economic recovery.
"The pairs trade 'short DAX' and 'long euro zone periphery
stocks' has worked pretty well, with the MIB particularly
strong," said Vincent Cassot, head of equity derivatives
strategy at Societe Generale.
"Volatility has risen in Europe due to the crisis in
Ukraine, and there's more appetite for protection, but overall
there's no panic among investors."
At 1100 GMT, the FTSEurofirst 300 index of top
European shares was down 0.2 percent at 1,294.80 points, after
gaining 1 percent on Monday.
Russian President Vladimir Putin announced on Tuesday that
Russia would move forward with procedures to annex Ukraine's
Crimean region, defying Western sanctions.
On Monday, the United States and the European Union imposed
personal sanctions on a small group of officials from Russia and
Ukraine accused of involvement in Moscow's military seizure of
the Black Sea peninsula, although the measures were seen as
modest by investors.
"The sanctions taken against Russia are relatively soft, and
there has been no real escalation in the tensions in the past
week, which is good news," said Talence Gestion fund manager
Alexandre Le Drogoff.
"Overall, the market has been quite resilient in this
Ukrainian crisis, but now it needs a positive catalyst to resume
its rally, and we might have to wait for first-quarter corporate
results for that."
Around Europe, the UK's FTSE 100 index was down 0.2
percent, France's CAC 40 was 0.1 percent lower, and the
euro zone's blue-chip Euro STOXX 50 index down 0.3
Shares in truck maker Scania featured among the
top losers, falling 5.5 percent after board members responsible
for assessing a takeover bid by Volkswagen for the
outstanding shares said the offer was too low and recommended
that minority shareholders reject it.
Oil and gas explorer Cairn Energy plunged 10 percent
after saying it would halt its share buy-back programme and
posted a 2013 loss of $556 million, hit by costs for
unsuccessful exploration in Morocco and the North Sea.
Europe bourses in 2014:
Asset performance in 2014:
Today's European research round-up