* FTSEurofirst 300 flat, near 6-year high
* DAX slips 0.1 pct after record high on Wednesday
* Utilities underperform as Citi downgrades some key stocks
By Sudip Kar-Gupta
LONDON, May 29 (Reuters) - European shares held firm near multi-year highs on Thursday, with the region’s main stock markets supported by prospects of new economic stimulus measures next week from the European Central Bank (ECB).
Utility stocks underperformed after Citigroup cut its rating on some southern European utility stocks, such as Enel , due to the prospect that regulatory pressures and increasing competition could impact earnings.
Citigroup’s downgrades led to a 0.5 percent fall in the STOXX Europe 600 Utilities Index, compared with a flat performance on the broader STOXX 600 index. The utilities index has risen 13 percent since the start of 2014, making it one of the top-performing sectors.
The pan-European FTSEurofirst 300 index was also flat at 1,377.89 points in early session trading, hovering close to a near 6-year high of 1,380.52 points reached earlier this week.
Germany’s DAX, which hit a record high of 9,957.87 points on Wednesday, slipped 0.1 percent to 9,926.22 points while France’s CAC declined 0.3 percent to 4,520.32 points.
“The trend is up, the trend’s your friend, but I wouldn’t buy up at these levels,” Darren Courtney-Cook, head of trading at Central Markets Investment Management, said. Courtney-Cook said he would prefer to wait for pullbacks before buying DAX futures contracts.
Expectations that ECB head Mario Draghi may cut interest rates or introduce other monetary policy measures next week to help Europe’s economy have enabled the region’s stock markets to maintain a broad, upwards trajectory since the start of 2014.
The FTSEurofirst 300 is up by around 5 percent since the start of 2014, while the DAX and CAC have risen between 4-5 percent.
Naeem Aslam, Ava Trade chief market analyst, said the majority of investors were still buying up equities on expectations of new ECB monetary policy measures next week, but cautioned that the outcome of the ECB’s meeting may not be as clear-cut as some think.
“The optimism is just on the back of the hopes that the ECB is ready to take action to fight deflation and boost the economy and traders are waiting for Mr Draghi to open the gates for further easing of monetary policy,” Aslam said.
“But make no mistake, this is not going to be this easy as many are thinking,” he said, referring to opposition to cutting rates that Draghi could face in some quarters of the ECB.
Europe bourses in 2014: link.reuters.com/pap87v
Asset performance in 2014: link.reuters.com/gap87v
Today’s European research round-up (Editing by Jane Merriman)