* FTSEurofirst 300, Euro STOXX 50 both down 0.3 pct
* Carlsberg sheds 6.8 pct after results miss, outlook
* Italian vote a reason for caution on euro zone shares -
* Natixis up 26.5 pct on restructuring plan
By Francesco Canepa
LONDON, Feb 18 European shares extended losses
to a third session on Monday after disappointing corporate
earnings and nerves ahead of Italy's election, with technical
charts pointing to further losses.
Carslberg, the world's fourth-biggest brewer,
sounded an alarm bell with a disappointing outlook and results,
sending its shares down 6.8 percent in volume two and a half
times the stock's 90-day average.
It was the top faller on the FTSEurofirst 300
index, which was down 0.3 percent at 1,157.89 points by 1145
GMT. It fell for a third straight day as lacklustre corporate
results led investors to take profits on the index, which
rallied at the start of the year.
The blue-chip euro zone Euro STOXX 50 was also
down 0.3 percent, at 2,606 points. Trading volume was less than
a third of its full-day average as Wall Street would be closed
for Presidents' Day.
French bank Natixis was a standout performer,
however, rallying 26.5 percent in volume seven times its
full-day average for the past 90 days as it unveiled plans to
simplify its control chain, paving the way for higher dividends.
Strategists said Italy's general elections were a further
reason for overall caution in the market as the prospect of a
fragmented parliament after the Feb. 24-25 vote fuelled concerns
a new government could struggle to stay the course on reforms.
Daniel Fermon, head of thematic strategy at Societe
Generale, said the Euro STOXX 50 could fall as much as 10
percent if zone risk flares up again, hitting the single
currency and leading investors who adopt quantitative
strategies, or "quants", to sell shares.
"I think many quants will continue to play this game
because, statistically speaking, it has always worked this way
for the last three years so they'll stick with this model,"
He recommended the pan-European blue-chip STOXX Europe 50
as a safer play thanks to its exposure to the
defensive healthcare sector and its lower correlation to
Investors would be looking for any hint about the European
Central Bank's views on the common currency when President Mario
Draghi testifies to the European Parliament on Monday afternoon.
Charts on the euro zone Euro STOXX 50 also painted a bleak
picture as the index edged below technical support at around
2,610, its 2012 high.
The index's failure to break above the 55-day moving average
last week was seen as a sign of further falls to come, with a
technical support level at 2,505, the 50 percent retracement of
the 2011 selloff, seen as a possible target.
"I think we'll soon see a drop down to the 2,505 area,"
Anders Soderberg, chief technical analyst at SEB Bank in
"If it's a correction, it ends there but there's certainly a
growing risk for a more profound setback, confirmed ... below
The index has fallen 6 percent since late January as
disappointing corporate results and nerves ahead of debt-laden
Italy's election triggered some profit taking, although it has
gained around 10 percent since the start of last year.
Around 38 percent of STOXX Europe 600 companies
that have reported results so far have missed consensus
forecasts, leading analysts to cut their 2013 estimates by 2.2
percent in the past 30 days, Starmine data showed.
Strategists at JPMorgan said falling earnings estimates were
capping the upside for equities, with cyclical shares, which
depend on economic growth and tend to show a greater correlation
to the earnings cycle, as the most likely underperformers.