* FTSEurofirst 300 index falls 1.2 percent
* Autos top decliners, Peugeot slips after cash call
* Charts show equities struggling
By Atul Prakash
LONDON, March 6 (Reuters) - European shares hit a one-week low on Tuesday morning as fresh concerns about growth in Europe and China, the world’s top metals consumer, prompted investors to cut their risk exposure.
Equities extended losses during the session, with traders citing a rumour that Greek restructuring will not happen until next week accelerating the decline and with a weaker PSA Peugeot Citroen weighing on auto stocks.
It is still not clear how much participation Athens will see for its bond swap and a failure to agree would put Greece back on the brink of a messy default.
A Greek finance ministry official denied that there was any plan to extend the March 8 deadline for investors to participate in the bond swap.
The Euro STOXX 50 volatility index was up 6.3 percent after hitting its highest level in more than two weeks, suggesting a decline in investors’ appetitie for riskier assets such as equities.
The FTSEurofirst 300 index of top European shares was down 1.2 percent at 1,068.14 points at 0951 GMT, after touching a one-week low of 1,067.26. The index, which fell 10.7 percent in 2011, is still up about 7 percent in 2012 after hitting a seven-month high in late February.
Auto shares, down 2.6 percent, were the biggest losers, led by a 6.3 percent fall in Peugeot after it unveiled details of its 1 billion euros capital increase, to be done at a price of 8.27 euros a share, roughly a 42 percent discount from its closing price on Monday.
Analysts said that recent discouraging macroeconomic data had prompted investors to sell equities, but the market’s longer-term outlook remained positive.
“Latest macroeconomic figures from the euro zone, especially at a time when the ECB’s major liquidity operations are over, have raised concerns of a recession and disappointed markets. On top of that, China has downgraded its growth forecast,” Koen De Leus, strategist at KBC Securities in Brussels, said.
“Investors should look for defensive companies that have high dividend yields. Pharmaceutical companies look attractive in the current environment, while the oil sector offers a very good hedge against what’s happening in Iran.”
Energy stocks outperformed the wider market, with the sector index down 0.5 percent.
Charts showed the euro zone’s blue chip Euro STOXX 50 index , down 1.2 percent at 2,499.29 points, was struggling, but analysts said that it was not yet certain that the recent rally was coming to an end.
“There are some worrying signs. The important level to watch is 2,484. If you fall below that, you will break the succession of higher lows that has been in place since November and suggest that the trend is turning,” said Phil Roberts, chief European technical strategist at Barclays Capital.
Some fund managers, however, saw value in equities in the longer term.
Anko Beldsnijder, managing director of Frankfurt-based MainFirst Asset Management, which manages 1.2 billion euros, said he was positive on the stock market going forward as a lot of money was still waiting to be invested.
“One should be a little bit more cyclical oriented. We look at things like financials, cars and metals and mining which have good potential,” he said.