* FTSEurofirst 300 down 0.2 pct, trims gains for the week
* Investors wary after Malaysian plane downed over Ukraine
* Heightened international pressure seen helping end crisis
* Swedish stocks rise on earnings boost
By Francesco Canepa
LONDON, July 18 European shares edged lower on
Friday as the downing of a passenger plane over Ukraine stoked
tensions between Russia and the West and outweighed some strong
earnings reports from Sweden.
Uncertainty over how the incident will affect the conflict
between the Ukrainian government and separatists meant many
investors were reluctant to open new long positions ahead of the
weekend in case the situation deteriorates.
But selling pressure was moderate and volatility low as the
loss of the Malaysian airliner with 298 people aboard was also
seen as intensifying international pressure to resolve the worst
crisis between Russia and the West since the Cold War.
"People in the market are still worried that there will be
an escalation in the conflict (following the plane crash),"
Peregrine & Black senior sales trader, Markus Huber, said.
"But it's so serious that maybe people will pull back from
the conflict now," he said.
Fighting between Kiev and pro-Russian separatists has
killed hundreds in Ukraine since protests toppled its
Moscow-backed president in February and Russia annexed the
The pan-European FTSEurofirst 300 index was down
0.2 percent at 1,360.27 by 1430 GMT, taking its drop over the
past two days to 1.2 percent and leaving it 0.6 percent higher
on the week.
The Euro STOXX Volatility index, which measures the
price of options on euro zone blue-chips, effectively gauging
investors' fears of future losses, fell nearly 3 percent after
hitting a two-month high earlier in the session.
Losses were mitigated by a number of strong profit reports
from Sweden, with mobile telecom gear maker Ericsson,
home appliances firm Electrolux and Swedbank
all reporting expectation-beating results.
Ericsson rose 8.4 percent, leading peers Alcatel
Lucent and Nokia higher, as its results
showed sales picked up at its networks unit thanks to growth in
the Middle East, China, the United States and India.
"Ericsson's sales in the U.S. were very resilient," Kepler
Cheuvreux analyst Sebastien Sztabowicz said, flagging a positive
read-across for Alcatel ahead of its own quarterly results.
With 12 percent of companies in the Europe STOXX 600
having reported results so far this earnings season, 73
percent have beaten or met expectations, according to Thomson
Reuters StarMine data.
"The market is so politically driven at the moment, which is
bad news as it means we neglect fundamentals such as earnings,"
Stockholm's OMXS index rose 0.8 percent.
Swedish truck maker Volvo bucked the trend,
falling 5.3 percent after posting a smaller-than-expected rise
in profit after a slow rebound in demand in Europe left it with
It led a sell-off in truck makers, with Daimler
and CNH Industrial down 2 percent and 1 percent
"You saw that for every major truck maker ... the recovery
seems to have started later than anticipated," Natixis analyst,
Kathleen Gailliot, said. "The potential is there but you have
got to have a bit of improvement in confidence."
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 Alistair Smout; Editing by Louise