* FTSEurofirst 300 down 0.1 percent
* French telecoms fall on prospect of price war
* Fresnillo drops after Q4 update
By Tricia Wright
LONDON, Jan 22 European shares dipped on
Tuesday, after a choppy session, as the prospect of price war in
the French telecom sector outweighed signs of economic
improvement in Germany.
France Telecom, Bouygues and Vivendi
shed between 4.5 percent and 4 percent in brisk trading
volumes after the head of Vivendi's SFR mobile operator said it
was cutting prices by as much as 25 percent.
Some support came from a better-than-expected reading of
German ZEW investor sentiment, up sharply for a second
consecutive month in January in a sign the euro zone crisis is
no longer hitting Europe's largest economy as hard as in late
The FTSEurofirst 300 closed down 0.1 percent at
1,165.49, having pared back earlier losses after a technical
sell-off that started on Germany's blue-chip DAX index.
While left nursing slight losses on Tuesday, the
FTSEurofirst 300 was left trading just a touch below a near
two-year high of 1,170.29 hit on Jan. 10, after a robust start
to 2013, which has seen the index climb almost 3 percent.
"(ZEW) helped markets move forward a little bit but I still
think a lot of indices are in wait-and-see mode where markets
are more or less digesting the big gains," Philippe Gijsels,
head of research at BNP Paribas Fortis Global Markets, said.
"Also markets are waiting a bit for earnings out of the
Tech companies Google Inc, International Business
Machines and Texas Instruments are set to report
after Wall Street's close, ahead of Apple Inc's
earnings release on Wednesday.
Strategists remained optimistic about the outlook for
European equities in spite of recent gains.
"Europe remains one of our overweight markets within our
portfolio. Valuations are still relatively attractive with
trailing price/earnings ratios at 12-1/2 which is still a full
point lower than the long-term average," Patrick Moonen, a
senior strategist at ING, said.
Elsewhere among fallers, Fresnillo shed 2.8
percent, with some analysts citing concerns over the potential
introduction of a mining royalty in Mexico.
The company said on an analyst call after announcing annual
silver production in line with its guidance, that the Mexican
government could look at bringing in a royalty on net profit
towards the end of this year.
"Perhaps it's that that's spooking investors," RBC analyst
Jonathan Guy said, adding that the results were "decent."
Trading volume in Fresnillo stood at 230 percent of its
90-day daily average.