* Ukraine tensions sap appetite for risk
* Shares dependent on economic growth hit on valuation worry
* FTSEurofirst 300, Euro STOXX 50 both flat
By Francesco Canepa
LONDON, April 14 Cyclical shares weighed on
European bourses on Monday as tensions in Ukraine and volatile
global markets prompted investors to take a more cautious stance
on growth and cash in on some of the best performers of the past
Appetite for risk dried up as Ukraine's president threatened
military action against pro-Russian separatists, raising the
prospect of costly international sanctions and further straining
investor nerves after a sharp selloff in global equities last
Shares in sectors which depend the most on economic
activity, such as travel and leisure, tech and
financial services fell between 1.5 percent and 1.9
percent, underperforming flat pan-European indexes.
The three sectors rose between 15 and 30 percent in the past
year, leaving them trading at hefty premia to their 10-year
average price-to-earnings multiple at a time of falling profit
estimates, Datastream data showed.
"With earnings forecasts now looking not so good for 2014,
people are looking at valuations," said Tom Elliott,
international investment strategist at deVere Group.
Tech stocks, in particular, are the most expensive in
Europe, trading at around 19 times their 12-month forward
earnings, against a 10-year average of about 16 times and the
STOXX 600's price-earnings ratio of 14.
Smaller biotech names such as Cellectis and
Genfit, shares in which more than doubled in value
since the start of the year, fell nearly 10 percent each. Larger
tech names Ericsson and ARM Holdings fell 4.3
percent and 1.7 percent.
Among other sharp movers, Greece's largest lender, National
Bank, fell 14 percent, making it the biggest decliner
on the FTSEurofirst 300 on speculation the bank might launch a
share offering to plug a capital shortfall.
Market losses were capped by a rise in some defensive
sectors, where earnings are less exposed to fluctuations in the
economic cycle, such as personal and household goods and
food and beverages, which were both up around 1 percent.
The pan-European FTSEurofirst 300 index flat at
1,312.36 points by 1402 GMT, having erased early losses after
strong results from U.S. bank Citigroup and
better-than-expected U.S. retail sales data.
The euro zone's blue chip Euro STOXX 50 index
was also flat, at 1,313.61 points.
The index fell 3.5 percent last week and analysts said the
trouble in Ukraine could prevent it bouncing back anytime soon.
"Geopolitical concerns are putting pressure on equities,"
said Christian Stocker, an equity strategist at UniCredit in
Munich. "Markets fear an escalation in tension will result in
more economic sanctions on Russia and that will have a negative
repercussion on Europe."
Several firms exposed to Russia fell. Finnish tyre maker
Nokian Renkaat, Austrian lender Raiffeisen Bank
International and Belgian financial group KBC
lost from 1.7 to 2.5 percent.
Charts also showed further losses were likely.
"Although the slope of the 200-day moving average remains up
at this juncture, the Euro STOXX 50 index has turned down from
the up-channel resistance line stretching back to 2011 and the
move below support around 3,150 is another worry for bulls,"
said Murray Gunn, the head of technical analysis at HSBC.
The index could find support around 2,971 points. On the
upside, 3,196 is considered a strong resistance level.
(Additional reporting by Atul Prakash in London and Blaise
Robinson in Paris; Editing by Janet Lawrence)