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* FTSEurofirst 300 down 0.7 percent
* Novo Nordisk sinks on U.S. drug approval delay
* JP Morgan sees opportunity in Spanish equity weakness
By Toni Vorobyova
LONDON, Feb 11 (Reuters) - European equities eased on Monday, pursuing the previous week's retreat from multi-month peaks and dragged down by Novo Nordisk after a regulatory set-back for a new drug.
The weakness in European equities was fairly broad with all but three sectors in the red. Energy and mining stocks were hit by falling commodity prices while political turbulence in Italy and Spain is still weighing on banks and on their national indexes.
The FTSEurofirst 300 provisionally closed down 0.7 percent, at 1,154.31 points, continuing a correction from 2-year highs set at the end of January which analysts said could have further to run in coming sessions.
"At this juncture we are not buying further equities," said James Butterfill, global head of equity strategy at Coutts. "Fundamentally we do like equities but at this juncture, from a technical short-term view ... we are being cautious."
Shares in Novo Nordisk plunged 13 percent, their worst fall in four years after U.S. regulators requested more tests on its key new insulin drug, potentially delaying the approval by several years and threatening the Danish firm's long-term financial targets.
The unexpected announcement prompted investors to ditch what had been one of the most expensive European pharma stocks, with some instead snapping up French rival Sanofi, whose own insulin drug now faces less competition in the near term.
"Novo was trading on twice the multiple of the likes of Sanofi, Roche and Novartis. It's a very well held stock that's relative expensive," said Kevin Lilley, European equity fund manager at Old Mutual Asset Management, who benefitted from Monday's move thanks to his strong position in Sanofi.
Prior to the sell off, Novo Nordisk had traded on 22.6 times its expected earnings per share over the next 12 month, compared to Roche on 13.4 times and Sanofi on just 11.2 times, according to Thomson Reuters StarMine data.
On a national basis, Spain's IBEX was the worst performer outside of Scandinavia, down 1.2 percent as a corruption scandal drove support for Spain's governing People's Party to a 20-year low.
Concerns about the impact of a 32 percent devaluation of Venezuela's bolivar currency on Spanish companies with a presence in Latin America - including Telefonica, Repsol, Mapfre and BBVA - also contributed to Madrid's underperformance.
"Spain suffered disproportionately in the consolidation so far. IBEX is down on the year and underperforming Dax even though Spanish bond spread to German bund are tighter," strategists at JPMorgan said in a note.
"We think there is an opportunity to add to Italy and Spain in this weakness as the recent political uncertainty is likely to fade very soon, within weeks."