* FTSEurofirst 300 index falls 0.3 percent
* Pan-European index trims losses after Philadelphia data
* Chance of sooner-than-expected U.S. rate rise hits
By Atul Prakash
LONDON, March 20 European shares fell on
Thursday amid hints that U.S. interest rates might start rising
sooner than predicted, although major indexes cut losses on data
showing robust factory activity in the U.S. mid-Atlantic region.
European stocks tracked U.S. markets, where equities slipped
after U.S. Federal Reserve Chair Janet Yellen said on Wednesday
the central bank will probably end its massive bond-buying
programme in the autumn and may start raising interest rates
around six months later.
In reaction, the FTSEurofirst 300 index fell as
much as 1 percent. It later trimmed losses to trade 0.3 percent
lower at 1,301.34 points by 1559 GMT, after the Philadelphia
Federal Reserve Bank said its business activity index rose to
9.0 in March from -6.3 in February.
"The worst-case scenario for the global market right now is
a soft patch in the United States, but the Philadelphia data
supports the idea that we haven't got one and recent weaker U.S.
economic numbers are weather-related," Graham Bishop, senior
equity strategist at Exane BNP Paribas, said.
"Higher bond yields aren't necessarily a bad thing, but the
transition phase can be bad for equities."
U.S. bond yields rose late on Wednesday after Yellen's first
news conference as the head of the central bank. Her remarks
suggested a more aggressive path toward higher interest rates
than many had expected. Bets in financial markets shifted
"What makes investors nervous is that it sounds risky for
the Fed to unveil a calendar when macro and micro signals are
still quite mixed," said David Thebault, head of quantitative
sales trading at Global Equities.
However, a number of insurers including AXA and
Aegon, are seen as benefiting from the shift in the
interest rate outlook. They bucked the trend and rose 3.6
percent and 4.1 percent respectively.
Among other risers, French aerospace and defence supplier
Zodiac Aerospace rose 5.1 percent to the top of
FTSEurofirst 300. The company said on Wednesday it was ready to
make new acquisitions after posting a 9.2 percent rise in
revenue for the first six months of its financial year.
Around Europe, Britain's FTSE 100 index was down 0.7
percent and Germany's DAX index fell 0.3 percent.
However, a Reuters poll showed that investors were bullish
on the market's outlook in the longer term. The poll of 37 fund
managers and strategists predicted the pan-European STOXX Europe
600 index would add almost 8 percent this year to end
2014 at 353 points, a six-year high.
The euro zone's blue-chip Euro STOXX 50 index
was expected to add a little more than 6 percent, to 3,300
points, a 5 1/2-year high.
Europe bourses in 2014: link.reuters.com/pad95v
Asset performance in 2014: link.reuters.com/rav46v
Today's European research round-up
(Additional reporting by Blaise Robinson in Paris; Editing by