* Weak German Ifo reading weighs on DAX
* LVMH slumps after below-forecast Q2 results
* DAX down 0.6 pct, CAC down 0.9 pct
* FTSEurofirst 300 index down 0.3 pct
By Sudip Kar-Gupta
LONDON, July 25 Weak German economic data and a
slump in the shares of luxury goods group LVMH weighed
on European stock markets on Friday.
Germany's benchmark DAX equity index, which hit a
record high of 10,050.98 points in late June, was down by 0.6
percent at 9,734.11 points going into the close of the trading
The DAX came under pressure after a survey by the respected
Ifo think tank showed that German business sentiment fell to its
lowest level in nine months in July.
"The Ifo number looked negative. I think the European stock
markets will drift slightly lower," said Darren Courtney-Cook,
head of trading at Central Markets Investment Management.
Courtney-Cook said he would be "short" on the DAX futures
- namely betting on future falls - if the index stayed
below 9,800 points. He expects European stock markets will edge
lower over the coming month.
LVMH HITS FRENCH MARKET
France's benchmark CAC equity index fell 0.9
percent, hit by LVMH's 5.8 percent drop.
The world's biggest luxury goods group was also the
worst-performing stock, in percentage terms, on the pan-European
FTSEurofirst 300 index, which slipped 0.3 percent to
LVMH reported second-quarter sales and profits that missed
market forecasts late on Thursday, citing a drop in demand in
China. The results were released after European stock markets
LVMH's woes also hit rival luxury goods companies, with
Richemont falling 2.3 percent while Kering
dropped 4.4 percent.
Loic Morvan, an analyst at investment bank Bryan Garnier,
cut his rating on LVMH to "neutral" from "buy", adding that
LVMH's business slowed significantly in the second quarter.
In Europe so far this quarter, 40 percent of companies have
missed earnings expectations, according to Thomson Reuters
StarMine data, underperforming the United States, where only 28
percent have lagged forecasts.
"Overall sentiment remains neutral, with investors
continuing to prefer U.S. stocks to European ones due to the
U.S. earnings season having delivered solid and mostly
better-than-expected results so far," said Markus Huber, senior
sales trader at Peregrine & Black.
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 Angus
MacSwan and Susan Fenton)