* FTSEurofirst 300 index falls 0.4 percent
* Barclays drags down banks on Qatar news
* Euro STOXX 50 faces stiff resistance at 2600
By Atul Prakash
LONDON, Nov 26 European shares retreated in
morning trading on Monday, with investors focusing on a meeting
of euro zone finance ministers on Greece and taking some profits
following last week's strong performance by major stock indexes.
Analysts said the market had potential to bounce back again
on any positive outcome of the euro zone meeting, at which the
ministers and International Monetary Fund officials will again
try to reach a deal to get international lenders to release a
new tranche of aid to debt-burdened Greece.
At 0909 GMT, the FTSEurofirst 300 index was 0.4
percent lower at 1,106.26 points after gaining for five straight
sessions and surging 4 percent last week, the best weekly
performance since early December last year.
"Last week was very good for the markets and it seems that
investors are taking a breather ahead of the euro zone meeting.
There is some caution, but it is also clear that Greece's
lenders will not allow the country to fail. A Greek default is
not an option," said Koen De Leus, senior economist at KBC in
"We are on the optimistic side. Investors should have
stop-losses in place to minimise their losses, but should be
prepared to buy the dips."
Sectors more dependent on economic activities were the top
decliners, partly on worries that any setback in talks relating
to the U.S. "fiscal cliff" of scheduled tax rises and spending
cuts from 2013 could derail the world's biggest economy.
U.S. lawmakers have made little progress in the past 10 days
on the issue. Serious negotiations are expected to resume this
week, with Democratic and Republican lawmakers trying to
convince the public they are willing to compromise and can reach
a deal before the end of the year.
Energy shares fell 0.8 percent and construction
stocks were down 0.5 percent. Banks fell 0.6 percent,
dragged down by Barclays, which fell 3.7 percent after
news Qatar Holding had cashed in on its remaining warrants in
FOCUS ON EUROPE
Investors' focus remained on Europe, with tens of thousands
of Italians rallying across the country over the weekend to
protest against austerity measures, and separatists in Spain's
Catalonia winning regional elections on Sunday.
The euro zone's blue chip Euro STOXX 50 index
dropped 0.4 percent at 2,546.90 points after surging 5.3 percent
last week, the best weekly performance in nearly a year.
"The index is seen finding support at 2,450 from where it
bounced back on several occasions in the past weeks," Petra von
Kerssenbrock, technical analyst at Commerzbank, said.
"We still have abundant liquidity in the market and the
positive ground tone prevails. It faces a massive resistance at
2,600, which proved to be a resistance in March 2012 and was a
support back in July 2011. It will be difficult to break the
level but we could go there and test it."
Analyst stayed positive on the market's longer-term outlook.
Strategists at Morgan Stanley upgraded European equities to
"attractive" from "neutral" in a 2013 outlook, expecting
double-digit percentage growth from the MSCI Europe index with
earnings revisions beginning to improve and global economic
indicators appearing to be troughing.