* SABMiller, Nestle give weak updates
* FTSEurofirst 300 and Euro STOXX 50 slip
* Ukraine tensions also weigh
* EPS growth needed to push shares higher -Reyl CIO
By Sudip Kar-Gupta
LONDON, April 15 Weak updates by leading
European companies held back the region's stock markets on
Tuesday, while the threat of costly sanctions against Russia
over the situation in Ukraine also pushed equities lower.
The pan-European FTSEurofirst 300 index, which rose
16 percent last year and hit a near six-year high of 1,355.29
points earlier this month, fell 0.3 percent to 1,315.28 points
in mid-session trading.
The euro zone's blue-chip Euro STOXX 50 index
retreated by 0.4 percent to 3,119.07 points. Germany's DAX
index - which hit a record high of 9,794.05 points in
late January - fell 0.6 percent to 9,281.89 points.
The DAX remained down after Germany's ZEW investor sentiment
reading fell for the fourth month in a row in April, as tensions
between Russia and Western powers over Ukraine darkened the
outlook for Europe's largest economy.
Russia declared on Tuesday that Ukraine was on the brink of
civil war as Kiev said an "anti-terrorist operation" against
pro-Moscow separatists was underway, though the crackdown
appeared to get off to a slow start.
"Things have not improved in Ukraine, and this is weighing
on the markets," said Francois Savary, chief investment officer
at Swiss bank Reyl.
Savary added that European stock markets now needed firm
evidence of a recovery in earnings to move higher, after making
little headway during the first quarter.
European shares have rallied over the last year, helped by
pledges from the European Central Bank (ECB) to support the
economy in its recovery from the effects of the euro zone's
sovereign debt crisis.
But this has also pushed stock market valuations higher, and
many investors have said companies now need to show a strong
recovery in profits to maintain the broader rally.
Graphic on MSCI Europe valuations:
On Tuesday, several companies posted business updates that
disappointed investors in some aspects.
Brewing company SAB Miller fell 2 percent after a
sales update that some analysts said failed to meet forecasts.
French cosmetics group L'Oreal and Nestle
both undershot market expectations with first-quarter
sales, although they forecast a return to top-line growth in
Savary remained "overweight" on equities, but Clairinvest
fund manager Ion-Marc Valahu said he had trimmed some equity
holdings over the last three weeks.
"So far, the results are coming in worse than expected,"
Valahu said. "That's why the markets have been consolidating a
Europe bourses in 2014: link.reuters.com/pap87v
Asset performance in 2014: link.reuters.com/gap87v
Today's European research round-up
(additional reporting by Francesco Canepa; Editing by Larry