* FTSEurofirst 300 retreats from highs hit on Thursday
* Telefonica falls after Q1 profits miss forecasts
* Prospect of new ECB stimulus keeps some traders bullish
By Sudip Kar-Gupta
LONDON, May 9 European shares retreated on
Friday as a disappointing business update from leading telecoms
group Telefonica sobered the mood after a rally on the
The pan-European FTSEurofirst 300 index, which on
Thursday hit a 2014 peak of 1,359.07 points that marked its
highest level in around six years, fell 0.3 percent to 1,354.74
points in mid session trading.
The euro zone's blue-chip Euro STOXX 50 index
retreated by 0.6 percent to 3,186.75 points.
The indexes are up around 3 percent and 2.5 percent
respectively since the start of 2014.
Shares in Spain's Telefonica fell 2.9 percent after
the company posted a 23 percent fall in first quarter net
profits that missed market expectations.
Energy services group Petrofac slumped by 15.8
percent after it issued a profit warning.
Nearly two-thirds of companies listed on the pan-European
STOXX Europe 600 index have posted first-quarter
updates so far, of which half have missed consensus forecasts,
according to Thomson Reuters StarMine data.
Christopher Mellor, equity strategist at London-based
Sunrise Brokers, said these signs of weak corporate results were
leading his firm to back an investment stance favouring bonds
"After 18 consecutive months of a pro-equity signal, our
market timing model has now moved to a pro-bond stance," said
Terry Torrison, managing director at Monaco-based McLaren
Securities, expected European equity markets to drift before
pushing higher in the second half of 2014, buoyed by
expectations that the European Central Bank (ECB) could take new
steps to support the region's economic recovery.
ECB President Mario Draghi said on Thursday that the ECB was
ready to take policy action next month if updated inflation
forecasts merited such a move.
"In the short term we may drift, but I'm still bullish on
the second half of this year. At some point, Draghi is going to
come up with something," said Torrison.
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 Toby
Chopra, John Stonestreet)