* FTSEurofirst 300 index ends down 1.4 percent
* Miners hurt by concerns over China tightening
* Vestas Winds drops after posts operating loss
By Joanne Frearson
LONDON, May 4 (Reuters)- European shares hit a two-week
closing low on Wednesday, hit by weak U.S. economic data,
concern over China's growth outlook and forecast-lagging
The pan-European FTSEurofirst 300 .FTEU3 index of top
shares closed down 1.4 percent at 1,134.61 points, hovering near
its 50-day moving average after dipping just below it earlier in
A break below is seen as a negative signal for equities.
The Euro STOXX 50 volatility index .V2TX, Europe's main
gauge of investors' discomfort, was up 5.1 percent after jumping
to its highest level since late March.
Volume was 123.3 percent of its 90-day average.
Sentiment worsened following comments from a Chinese
official that Beijing might further tighten monetary policy to
curb inflation by raising banks' required reserves.
"European companies which have exposure to the emerging
markets margins could slow, with the possibility of more
tightening, but domestically Europe should still do well," said
David Hussey, head of European & EAFE Equities at Manulife Asset
Management, which has $180 billion in assets under management.
"In the short-term, I expect defensive stocks to outperform
over the summer."
Mining stocks featured among the worst performers on
concerns tightening measures in top consumer China would
constrict demand, with the STOXX Europe 600 Basic Resources
index .SXPP down 2.9 percent.
Antofagasta (ANTO.L) dropped 9 percent after the Chilean
miner said first-quarter copper production missed targets. The
miner also traded without the attraction of its interim dividend
and a 100 cents special payout. [ID:nLDE7421HK]
The market extended losses in afternoon trade after U.S. ISM
data fell below forecasts and U.S. private employers added fewer
jobs than expected in April, adding to investors' concerns about
the U.S economic recovery. [ID:nN04209762]
The bearish economic sentiment took a chunk out of most
large indexes, with the FTSE 100 .FTSE index down 1.6 percent,
Germany's DAX .GDAXI down 1.7 percent and France's CAC 40
.FCHI down 1.3 percent.
However, Portugal's PSI 20 .PSI20 bucked the trend and
traded higher for most of the session as the market digested
news of a 78 billion euro three-year bailout deal with the
European Union and the IMF. It closed down a modest 0.2 percent.
Weak earnings news also weighed. Vestas (VWS.CO) slumped 8
percent after the world's biggest wind turbine manufacturer by
market share posted a bigger than expected first-quarter
operating loss. [ID:nLDE6650QH]
Nearly half of the 110 companies on the STOXX Europe 600
index that have so far reported first-quarter earnings
have missed analysts' forecasts, underperforming their U.S.
peers, data from Thomson Reuters StarMine shows.
The STOXX Europe 600 offers cheaper valuations than U.S.
stocks. According to Thomson Reuters Datastream, the European
gauge carries a 12-month price-to-earnings multiple of 10.9
versus a 10-year average of 13.5 and the S&P 500's 13.2. The
10-year average of S&P 500's forward P/E is 15.4 times.
"Valuations are not demanding, we favour companies which
have the ability to have pricing power and also in the position
to cope with commodity costs," Veronika Pechlaner, a manager on
the 100 million euro ($144 million) Ashburton European equity
(Reporting by Joanne Frearson; Editing by Will Waterman)