* FTSEurofirst 300 falls 0.2 percent
* Hugo Boss falls after share placement
* Ahold down after below-forecast profit
By Atul Prakash
LONDON, May 28 European shares fell on
Wednesday, with Hugo Boss putting pressure on the market after
Permira placed a 5.6 percent stake in the company and Ahold
slipping after its first-quarter operating profit came in below
Shares in fashion group Hugo Boss fell 2.4
percent to 103.35 euros, one of the biggest drags on the
pan-European FTSEurofirst 300 index, after a source
familiar with the transaction said the shares were placed with
institutional investors at 101.50 euros apiece.
And Dutch supermarket chain Ahold slipped 2.5
percent after its operating income, adjusted for one-off
factors, dropped 6.2 percent as margins fell in the United
States and the Netherlands, its main markets.
The two companies put pressure on the broader market, with
the FTSEurofirst 300 index of top European shares falling 0.2
percent to 1,375.45 points by 0815 GMT, after hitting its
highest level in more than six years on Tuesday.
"The market has some potential to rise further in the summer
after recent gains, but equities are clearly not that cheap
anymore," Gerhard Schwarz, head of equity strategy at Baader
Bank in Munich, said.
"We might face some headwinds going forward as earnings
expectations for the second half are too ambitious and could be
revised down and economic growth might moderate next year."
Germany's DAX fell 0.1 percent after setting
another record high at 9,957.87 points early on Wednesday.
Analysts said that in the near term, shares could bounce
back on expectations of further improvements in economic
indicators from the United States and Europe and on hopes of
more policy easing by the European Central Bank (ECB).
Data on Tuesday showed that orders for long-lasting U.S.
manufactured goods unexpectedly rose in April, home prices
advanced more than expected in March and consumer confidence
rose to near its highest since 2008.
Investors also expect the ECB could cut interest rates at
its June 5 policy meeting. ECB President Mario Draghi said on
Tuesday the central bank was aware of the risks from prices
remaining too low for too long and it was equipped to get
inflation back to its target again.
"Investors are banking on the hopes that the ECB president
will initiate some sort of help to fight the deflation and boost
the economic growth in the region, but at the same the threat of
no action by the ECB remains as real as it can be," Naeem Aslam,
chief market strategist at Ava Trade, said in a note.
"But, for the time being, a sharp sell off in the equity
markets does not seem to be an option as traders keep moving the
markets from strength to strength."
On the positive side, Telecom Italia rose 3.7
percent after Goldman Sachs raised its price target for the
stock to 1.50 euros from 0.95 euros and retained its "buy"
rating, traders said.
Europe bourses in 2014: link.reuters.com/pap87v
Asset performance in 2014: link.reuters.com/gap87v
Today's European research round-up
(Editing by Mark Potter)