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European shares fall on stake sales, more gains expected
May 14, 2013 / 8:46 AM / 5 years ago

European shares fall on stake sales, more gains expected

* FTSEurofirst 300 index falls 0.3 percent

* Stake sales in GDF, Jeronimo Martins weigh

* Charts show overall momentum positive

LONDON, May 14 (Reuters) - European shares fell on Tuesday, pressured by sales of stakes in some firms but with an improving economic backdrop suggesting the market could soon eclipse recent multi-year highs.

French utility GDF Suez fell 3.2 percent after Groupe Bruxelles Lambert said it launched the sale 2.7 percent of the capital in the company.

Jeronimo Martins dropped 5.3 percent after a subsidiary of Heerema Group said on Monday it was selling a stake of up to 5 percent in the Portuguese retailer.

At 0811 GMT, the FTSEurofirst 300 index of top European shares was down 0.3 percent at 1,227.26 points. The index is up more than 8 percent this year and climbed to a five year-high late last week.

The euro zone’s blue chip Euro STOXX 50 index fell 0.5 percent to 2,762.60 points, but charts suggested that a sharp and prolonged sell-off was unlikely.

“The index will make a new attempt to continue its recent upward journey as moving averages are rising and overall technical condition remains supportive,” Petra von Kerssenbrock, technical analyst at Commerzbank, said.

She saw resistance at its recent high of 2,805 and the next major hurdle thereafter at around 3,050-3,070, which was a strong resistance level in 2011.

Analysts said that after a short period of consolidation, the market was expected to resume its move towards new highs as corporate earnings and macroeconomic numbers were supportive.

“The most recent batch of economic data, especially the strong retail figures out of the U.S. yesterday, look better,” Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets in Brussels, said.

“Hopes of a recovery in the second half of the year could provide markets with another leg to support the rally. Against this backdrop, more cyclical sectors that have badly lagged could start to outperform.”

Shares in EADS rose 1.8 percent in brisk volumes after the European aerospace group posted a sharp rise in core profit.

Despite the news on GDF Suez, the utility sector outperformed the wider market on merger and acquisition news.

United Utilities climbed 4.1 percent to become the top gainer on the FTSEurofirst 300 index after peer Severn Trent , a British water company, confirmed it had received a takeover approach from a consortium including Borealis Infrastructure and the Kuwait Investment Office.

Shares in Severn Trent surged 18 percent.

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