March 13, 2014 / 9:15 AM / 4 years ago

Europe shares pause after sell-off; Morrison sinks

* FTSEurofirst 300 up 0.2 pct, Euro STOXX 50 up 0.2 pct

* Morrison’s warning sparks sell-off among UK retailers

* Mounting worries over Chinese growth limit rebound

By Blaise Robinson

PARIS, March 13 (Reuters) - European stocks inched higher early trade on Thursday, halting their two-week slide, although a sell-off among UK retailers after a profit warning by Morrison’s limited the rebound.

Shares in Adecco, the world’s largest staffing agency, were also among the top losers, down 8 percent after Swiss investment firm Jacobs Holding and the Jacobs family sold a 16 percent stake for 2.2 billion swiss francs ($2.5 billion).

At 0845 GMT, the FTSEurofirst 300 index of top European shares was up 0.2 percent at 1,309.22 points. The index has slipped 3.2 percent since late February, hurt by tensions in Ukraine and worries over a slowdown in Chinese economic growth.

“It’s a perfect market for swing traders,” TradingSat analyst Alexandre Tixier said.

“We’ve entered a very volatile consolidation phase, and the best strategy is to go contrarian and buy when there’s a big negative move, and sell when stocks quickly bounce back. The market could stay in this phase for a couple of months.”

UK retailers dropped following Wm Morrison’s sharp cut to its profit outlook, which sent its shares down 7 percent. Rivals Sainsbury’s and Tesco lost 6 percent and 3.4 percent respectively.

Also rattling investors, data showed China’s economy slowed markedly in the first two months of the year, with growth in investment, retail sales and factory output all dropping to multi-year lows.

The figures, which fuelled worries of a greater-than-expected cooling of the world’s second-biggest economy, weighed on copper prices, which were hovering not far off multi-year lows on Thursday.

“In the short-run, equity markets are risk-averse due to the political uncertainties and the fear of a slowdown in China,” said Christian Stocker, equity strategist at UniCredit.

“But in the medium-term, the picture remains positive for equities. Our mid-year index target for the DAX is 10,000 points and for the Euro STOXX 50 is 3,250 points.”

Around Europe, Britain’s FTSE 100 index was flat, Germany’s DAX index up 0.2 percent, and France’s CAC 40 up 0.2 percent.

The euro zone’s blue-chip Euro STOXX 50 index was up 0.2 percent at 3,071.23 points.

Tensions in Ukraine also limited the market’s rebound. U.S. President Barack Obama warned Russia it faced costs from the West unless it changed course in Ukraine, and pledged to “stand with Ukraine” as he met with the country’s new prime minister in Washington.

Europe bourses in 2014:

Asset performance in 2014:

Today’s European research round-up

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