* STOXX down 0.1 pct
* Banks pull back, miners biggest sectoral fallers
* In France, small-caps outperform blue chips
* PostNL, Tod's slump as earning updates disappoint
* Euro zone investor morale up
* Earnings growth for Eurozone corporates 20%
(ADVISORY- Follow European and UK stock markets in real time on
the Reuters Live Markets blog on Eikon, see cpurl://apps.cp./cms/?pageId=livemarkets)
By Danilo Masoni and Helen Reid
MILAN/PARIS, May 8 European shares dipped on
Monday as the relief rally that greeted Emmanuel Macron's
victory in the French presidential election petered out although
strong earnings growth continued to underpin demand for the
Average earnings growth for major euro zone blue-chip firms
is more than 20 percent, according to Thomson Reuters data,
while political risk that had put off some investors is fading.
The pan-European STOXX 600 index was down 0.2
percent, while France's CAC fell 0.9 percent after
hitting its highest levels for more than nine years.
Germany's DAX dipped 0.2 percent after touching a
new all-time high.
Pro-business centrist Macron's victory over protectionist
and anti-EU candidate Marine Le Pen had been widely anticipated
but was welcomed by markets. The focus will now turn to
legislative elections in June in which his En Marche movement
must win a parliamentary majority to ensure he is able to
deliver the reforms he has promised.
"The market had already strongly rallied into this
election," JP Morgan global market strategist Emmanuel Cau said.
"We've cut a little bit of risk, specifically in the capital
goods and chemicals sectors."
Banks, which are more sensitive than other sectors to
political factors, turned negative, with the euro zone banks
index falling 0.9 percent having hit its highest since
BNP Paribas and Societe Generale fell
1.5 percent and 2.5 percent respectively.
Some market participants had speculated that a Macron win
could be the last piece of the puzzle for the European Central
Bank to begin rolling back its ultra-loose monetary policies.
Banks have been penalised by ultra-low interest rates and
possible tightening measures by the ECB could help ease off
pressure on their margins.
In France, mid- and small caps fell 0.2 percent,
less than the drop seen in the more internationally exposed
blue-chip index. SYZ Asset Management analysts expect companies
with domestic exposure to be favoured by Macron's plans.
Among French blue chips, they see carmakers Renault
and Peugeot benefiting from greater job
market flexibility and from incentives to buy less polluting
cars. Construction firms Vinci, Eiffage and
Saint Gobain also look to be in line for a boost from
plans to modernise infrastructure.
Shares in Renault, Peugeot, Vinci and Saint Gobain were all
lower, however, tracking the broader losses, while Eiffage added
Investors remained broadly upbeat about prospects for
European equities, which have started to outperform U.S. and
British peers on the back of one of the strongest earnings
seasons in many years and robust economic data.
JP Morgan's Cau said the French election result could still
boost investment in European stocks and make the region more
attractive in the medium term.
On Monday, a survey showed that investor sentiment in the
euro zone hit its highest level for almost a decade in May,
improving more than expected thanks to a strong assessment of
the economic situation and expectations that political
uncertainty will diminish.
There were also some earnings updates driving price action
on Monday, some of which fell short of market expectations.
PostNL fell 6 percent after revenue growth at the
Dutch postal firm missed expectations in the first quarter,
while a weak first-quarter and a broker downgrade sent Italian
luxury goods maker Tod's down 10 percent.
Peer Moncler fell 3.2 percent, the
worst-performing Italian blue-chip stock.
But the picture for earnings remains strong. According to
Thomson Reuters data just over half of European companies have
reported results, with 72 percent beating expectations and 7
percent meeting them.
Shares in Akzo Nobel fell 3.2 percent after the
Dutch paint maker rejected a third takeover proposal from larger
U.S. rival PPG Industries. It said the 26.9 billion euro
proposal undervalued the company, faced antitrust risks and does
not address other concerns such as "cultural differences".
(Reporting by Danilo Masoni and Helen Reid; Editing by