* FTSEurofirst down 0.8 pct, Euro STOXX 50 falls 0.7 pct
* Getinge slumps 10.3 percent, leads healthcare selloff
* HSBC sees Europe outperformance as economy improves
By Francesco Canepa
LONDON, Oct 8 European shares fell on Tuesday as
a U.S. budget deadlock unnerved investors and medical technology
group Getinge led a sellof in the healthcare sector
after a profit warning.
The pan-European FTSEurofirst 300 index shed 0.8
percent to 1,231.27 points, down for the fourth time in five
sessions as U.S. lawmakers remained deadlocked over a government
shutdown and raising the country's debt limit.
The euro zone's blue-chip Euro STOXX 50 index,
meanwhile, fell 0.7 percent to 2,903.35 points.
The U.S. Congress has only nine days left to raise the
sovereign debt ceiling and avert a default.
"The most likely scenario is that it won't happen but for
sure it 'freezes' some investors (from buying) in the very short
term," said Marc Renaud, chairman of Paris-based Mandarine
Gestion, which manages 1.8 billion euros ($2.44 billion).
Mandarine has cut the net equity exposure of its asset
allocation fund to 37 percent currently, from 43 percent in
August, using derivatives to sell European indexes at a future
date. The fund's maximum net exposure is 60 percent.
Among single stocks, Getinge fell 10.3 percent to the bottom
of the FTSEurofirst 300 in volume 14 times the average for the
past three months after the group warned on its profits, citing
delays to the benefits of an acquisition, taxes and exchange
The stock led fallers in the STOXX Europe 600 Healthcare
index, which fell 1.2 percent. Drugmakers Novartis
and GlaxoSmithKline also weighed after seeing
their price targets cut by JP Morgan and Berenberg,
Getinge's warning followed similar moves by consumer goods
group Unilever and cruise operator Carnival in
Analysts are cutting their estimates for European companies
despite better economic data for the region, a move often in
response to weaker emerging market (EM) currencies. The pace of
downgrades, however, has slowed in recent weeks, Datastream data
"There are some specific issues such as EM currency
weakness, but we expect the improving economic backdrop to drive
upside (earnings) surprises from here," Daniel Grosvenor, global
strategist at HSBC bank, said.
"Analysts are still revising down their estimates, but at a
slower pace than previously, and that ... effect is usually
positive for the market."
HSBC expects the FTSEurofirst 300 and the Euro STOXX 50 to
climb about 13.5 percent to hit 1,400 points and 3,300 points by
the end of 2014, respectively, outpacing the U.S. S&P 500
European shares have outperformed their U.S. counterparts
since July as economic momentum in Europe improved, the U.S.
monetary policy became more uncertain and, more recently, amid
the threat of a U.S. default.