* FTSEurofirst 300 down 0.3 pct, Euro STOXX 50 falls 0.4 pct
* Telecom Italia falls to record low on spin-off doubts
* Satellite company SES hit by Morgan Stanley downgrade
* Medium-term trend remains positive -ACIES fund manager
By Sudip Kar-Gupta
LONDON, July 16 European shares edged down on
Tuesday, slipping back after rallying from 2013 lows over the
last two weeks, with Telecom Italia underperforming
due to uncertainty over the company's plans to spin off its
The pan-European FTSEurofirst 300 index was down by
0.3 percent at 1,196.76 points in mid-session trading, while the
euro zone's blue-chip Euro STOXX 50 index fell 0.4
percent to 2,676.81 points.
Telecom Italia fell 3.5 percent to a record low, making it
one of the worst-performers on the FTSEurofirst 300. The company
has put on hold spin-off plans for its network, which could
hamper efforts to reduce debt.
Satellite company SES also featured among
Europe's worst performers, falling 3.6 percent. Traders
attributed the fall to a move by Morgan Stanley to cut its
rating on the stock to "underweight" from "equal-weight".
The FTSEurofirst 300, which has risen some 6 percent since
the start of 2013, hit a 5-year high in late May of 1,258.09
It dropped to a 2013 low of 1,111.11 points in late June on
expectations the U.S. Federal Reserve would scale back economic
stimulus measures. It has since recovered as central banks have
sought to reassure that they will continue to support the global
Andreas Clenow, hedge fund trader and principal of ACIES
Asset Management, said the short-term trend might be for
equities to pause after the move up over the last two weeks, but
he felt the medium-term trend remained positive.
He said he was putting on "long" positions at current levels
to bet on further gains. "I am quite optimistic about the UK and
European markets. I am entering 'longs' at these levels," he
said. "In the short-term, the move up may pause for breath, but
I'm prepared to take that pull-back and I think the medium-term
trend is to the upside."
Many analysts are citing signs of a gradual global economic
recovery and prospects of stronger corporate earnings as
supportive for equities.
Scott Meech, co-head of pan-European equities at Union
Bancaire Privee (UBP), said he believed now was a good time to
add to European equity holdings, citing supermarket chains
Carrefour and Dia, and Dutch electronics
group Philips among his favoured picks.