European shares' rally pauses for breath
* FTSEurofirst 300 flat, consolidates 22-month high
* Euro STOXX 50 up 0.1 pct, charts show trend still up
* Chinese inflation concerns hit miners
* Cap Gemini leads tech rally
* Commerzbank leads fallers on cap hike talk
By Francesco Canepa
LONDON, Jan 11 (Reuters) - European shares were flat on Friday, consolidating 22-month highs, as concerns about faltering monetary stimulus from China hit basic resources stocks and offset gains in tech shares.
But charts and asset flows data showed interest for shares was still on the rise as accomodative central bank policies across the world drove down bond yields and pushed investors towards shares.
Resources stocks fell 1.4 percent at 1152 GMT as a pick-up in inflation in China, the world's largest consumer of metals, narrowed the scope for the central bank to boost the economy by easing policy.
They weighed on the FTSEurofirst 300 index of top European shares, which was flat at 1,164.72 points at 1209 GMT, still within a stone's throw of the 22-month high of 1,170.29 points hit in the previous session.
"We've seen some dribble, dribbe selling on the miners on the back of the Chinese data, with no significant buying as the (market) is still at record level," Matt Basi, a senior sales trader at CMC market said.
Basi said any positive news from the U.S. earnings season, which was off to a positive start this week, would likely reignite the rally as investor sentiment remained positive.
Keeping the index afloat were tech shares, led by French IT services group Cap Gemini, which rose 4.4 percent after its Indian peer Infosys raised its revenue forecast.
Finnish handset maker Nokia extended gains from the previous session, when it unveiled strong sales of its Lumia smartphones.
It helped the euro zone blue- chip Euro STOXX 50 index rise 0.1 percent to 2,711.25 points after a lower start.
Intra-day charts on the Euro STOXX 50 showed buyers coming back into the index at around 2,703, with an ascending line connecting intra-day lows from Jan. 8 supporting the index.
"Prices are supported by an ascending trend line born from 2,685," Philippe Delabarre, a technical analyst at Trading Central in Paris. "As long as 2,685 is support, look for further upside."
He set a target at 2,735, the extension of the height between the support at around 2,690 and the top on Jan. 7 at 2,714.
"On the contrary, a push below 2,685 would trigger additional decrease to 2,660 (the upper end of a bullish gap on Jan. 2)."
The Euro STOXX 50 has risen 26 percent since late July, as bold central bank action to revive the global economy and shore up debt markets attracted investors into equities and depressed sovereign bond yields.
Over the four business days to Jan. 8, equity mutual funds took in $6.8 billion, with equity flows exceeding bond flows, EPFR data showed, as central banks' easy monetary policies depressed bond yields and pushed investors towards equities.
Investors in the United States were also warming to European shares after significantly reducing their exposure at the start of the financial crisis in 2008.
U.S. funds invested in European equities recorded net inflows for the 14th straight week in the seven days to Jan. 9, Lipper data showed.
Cyclical euro zone stocks - more sensitive to economic growth and financial stability - benefited the most from the growing appetite for shares.
The Russell Eurozone Dynamic Index, made up of companies whose earnings and share prices are more sensitive to economic and credit cycles as well as market volatility, rose 8.3 percent in the fourth quarter and 3.4 percent in the week to Jan. 7.
Top holdings in the Dynamic Index include German industrial conglomerate Siemens and stocks heavily correlated with sovereign debt, such as Spanish bank Santander.
In a sign the troubles at euro zone banks were not over, as new financial stability measures required them to hold higher capital reserves, Commerzbank was hit by sellers on talk of the need for a possible rights issue.
Commerzbank was down 3.3 percent in volume already one and a half times its full-daily average, compared to just 42 percent traded on the FTSEurofirst 300.
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