* FTSEurofirst 300 down 0.5 pct, Euro STOXX 50 falls 0.8 pct
* Donetsk clashes peg risk-sensitive shares back
* Wall Street-led rally quickly fades
* Tesco boosted by CEO resignation
By Alistair Smout
EDINBURGH, July 21 European stocks fell on
Monday, hit by a drop in German stocks as sensitivity to tension
in Ukraine mounted.
German blue chip stocks underperformed, with the DAX
down 0.4 percent, as fighting erupted in the rebel-held
city of Donetsk.
Risk-sensitive shares in the travel and leisure and
autos and parts sectors, both down 1 percent, have been
under pressure since Thursday, after the Malaysian passenger
plane was shot down over Ukraine.
Some in the West are calling for a new series of sanctions
against Russia, seeing the latter as ultimately complicit in the
downing of the jet. Washnigton has been tougher than the
European Union so far.
Germany in particular has high exposure to Russia, and is
heavily dependent on it for its energy needs.
"The proximity to the Ukraine crisis does cause European
investors to be a bit more circumspect over the issues there,
while Wall Street is more distant and seems to be able to push
on regardless," Jeremy Batstone-Carr, analyst at Charles
Batstone-Carr said that concerns over retaliatory moves by
Russia, included the possibility that they might switch off gas
taps to Europe, made European investors especially nervous.
The pan-European FTSEurofirst 300 was down 0.5
percent to 1,356.22 by 0800 GMT, with the euro zone EuroSTOXX 50
down by 0.8 percent at 3,138.58.
Nicolas Suiffet, technical analyst at Trading Central, said
that despite a rebound on Friday, futures on the EuroSTOXX 50
were still capped by resistance.
"As long as 3208 is resistance, look for choppy price action
with a bearish bias," Suiffet said.
Providing support to the market was Tesco, up 1.8
percent to add the most points to the FTSEurofirst 300 after it
said Chief Executive Philip Clarke would step down, bringing an
end to three years in charge.
Rivals WM Morrison and Sainsbury fell 2.2
percent and 1.4 percent as traders said Tesco's new leader may
be able to turn Britain's biggest retailer, which has just
issued a profit warning, around.
Europe bourses in 2014: link.reuters.com/pap87v
Asset performance in 2014: link.reuters.com/gap87v
Today's European research round-up
(Editing by Jeremy Gaunt)