* FTSEurofirst 300 falls 0.2 pct
* Euro STOXX 50 down 0.2 pct
* Fresenius slumps on proposed U.S. Medicare cuts
* China probe hits Danone shares
By Sudip Kar-Gupta
LONDON, July 2 Medical group Fresenius
and food group Danone weighed on European shares on
Tuesday, with traders expecting little near-term progress for
The pan-European FTSEurofirst 300 index was down by
0.2 percent at 1,161.72 points in early morning trade while the
euro zone's blue-chip Euro STOXX 50 index also fell
0.2 percent to 2,616.91 points.
German group Fresenius dropped 10 percent to make it the
worst performing FTSEurofirst 300 stock. Traders attributed its
slump to proposals by the U.S. federal government for rate cuts
of up to 9.4 percent in Medicare funding for dialysis centres.
France's Danone also fell 1.4 percent to feature on the
FTSEurofirst 300's loser board after China launched a probe into
five foreign infant milk companies for possible anti-trust
violations, according to the Beijing Times.
European shares made a positive start to the third quarter
on Monday, but the FTSEurofirst 300 remains some 8 percent off
its 2013 peak of 1,258.09 points, which marked a five-year high.
The index has recovered from its 2013 low of 1,111.11
points, hit in late June, and is up around 2 percent this year,
but traders saw little near-term progress for European equities.
A 2013 rally in global equities came to a halt last month
after the U.S. Federal Reserve said it would eventually scale
back economic stimulus measures that have helped drive the rise.
Uncertainty over the timing and impact of this has led many
traders to hold off from taking on big new equity holdings.
"We're range-bound," said Andreas Clenow, hedge fund trader
and principal of ACIES Asset Management. "The longer trend is
still up, but the medium trend is still down for European
Clenow and others saw European equities stuck in that range
for much of the third quarter, before gradually resuming an
upwards trajectory towards the end of the year.
Hendrik Klein, head of high-frequency trading and asset
management firm Da Vinci Invest AG, said he was buying and
selling Germany's DAX, which was down by 0.5 percent at
7,946.98 points, in tight ranges in the current market.
"I am selling the DAX above 8,000 and buying it when it dips
below the 8,000 mark," he said.
(Editing by Catherine Evans)