* FTSEurofirst 300 flat, Euro STOXX 50 down 0.07 pct
* FTEU 300 set to snap longest run of weekly gains in 2 yrs
* Euro STOXX 50 finds support on 50-day moving average
* Buying convertibles seen good way to avoid pull-backs
* Barclays halts sell-off sparked by U.S. dark pool lawsuit
By Blaise Robinson
PARIS, June 27 (Reuters) - European stocks were steady around midday on Friday, halting a week-long sell-off, with Airbus rising after sources said the European plane maker is set to clinch a deal with Rolls-Royce for A330 engines.
Airbus shares were up 1.5 percent while Rolls-Royce shares were up 1.3 percent after sources told Reuters Airbus is set to upgrade its A330 with engines provided exclusively by Rolls-Royce, opening a new chapter in the fight for wide-body jet orders with Boeing’s 787 Dreamliner.
At 1122 GMT, the FTSEurofirst 300 index of top European shares was flat at 1,370.55 points. The index - which has lost about 2 percent in the past five sessions, hurt by downbeat U.S. growth data as well as worries over violence in Iraq - is set to snap a 10-week long run of weekly gains, its longest winning streak since mid-2012.
The euro zone’s blue-chip Euro STOXX 50 index was down 0.07 percent at 3,230.93 points, but its losses were limited by a strong support level at 3,225, representing the index’s 50-day moving average.
“The low-growth environment, flagged by the latest U.S. and European data, is actually not a bad thing for equities. It forces asset allocators to switch out of fixed income, where the returns are extremely low, and into more risky assets such as stocks,” said David Thebault, head of quantitative sales trading at Global Equities, in Paris.
“While stock indexes look toppish in the short term, one way to play this rotation towards risk is to buy convertible bonds. It’s a great hedge against a potential stock market correction in the next months, while maintaining exposure to a further leg-up in stocks in the longer term.”
Around Europe, UK’s FTSE 100 index was up 0.2 percent, Germany’s DAX index up 0.06 percent, and France’s CAC 40 up 0.09 percent.
Shares in Barclays stabilised following their 6.5 percent drop on Thursday after the Attorney General filed a securities fraud lawsuit accusing it of giving an unfair edge to its U.S. high-frequency trading clients in its “dark pool” business.
Analysts at Citi pointed to the “negligible” revenue contribution of dark pools to Barclays, saying the impact on the rest of the equities business should be limited so long as any fine is proportionate.
“I wouldn’t be a keen buyer of the stock until we know more detail about what’s going on,” said Matt Basi, senior sales trader at CMC Markets. “To say it’s not meaningful because of its small revenue contribution is disingenuous, as it is reputational damage that also counts.”
Europe bourses in 2014: link.reuters.com/pap87v
Asset performance in 2014: link.reuters.com/gap87v
Today’s European research round-up (Additional reporting by Alistair Smout in Edinburgh; Editing by Toby Chopra)