* EuroSTOXX 50 flat, in sight of 18-month high
* Earnings concerns prompt some profit-taking
* Charts show scope for further gains after consolidation
By Toni Vorobyova
LONDON, Jan 18 Major European equity indexes
consolidated near multi-month peaks on Friday, with miners
supported by strong Chinese data but concerns ahead of the
corporate earnings season prompting some investors to lock in
European companies start reporting next week. They are
expected to post a 1 percent year-on-year drop in fourth-quarter
earnings, on average, against a forecast for 2.1 percent for
U.S. peers, according to Thomson Reuters StarMine.
With the EuroSTOXX 50 index of euro zone blue chips
up some 12 percent since mid-November, some
investors are turning more cautious.
The index was broadly steady at 2,720.06 at 1114 GMT on
Friday, in sight of last week's 18-month high of 2,735.36
points. The broader, pan-European FTSEurofirst 300 was flat at
1,165.74 points, near 2-year peaks.
"The rally from November is still intact, but it's getting a
bit tired now," said Stewart Richardson, chief investment
officer at RMG.
"Now is not a great time to buy, we are just saying take a
back seat. If anything, look to book some profits here, and if
you are not willing to do that, maybe buy some downside
To reduce the cost of any such protection, strategists at
BNP Paribas recommend buying an at-the-money February put on the
EuroSTOXX 50 and selling the equivalent contract on U.S. S&P 500
or on the German DAX, where they expect economic
growth - and thus corporate earnings - to hold up better.
On the flip side, though, the lower expectations for both
the economy and earnings in Europe leaves plenty of scope for
French car maker Renault added 2.7 percent after
pledging a return to sales growth this year.
The basic resources sector, meanwhile, rose 0.4 percent
after data showed Chinese economic growth accelerating
for the first time in two years in December, boosted by stronger
retail sales and industrial output.
Overall, sentiment remained relatively upbeat, with implied
volatility on the EuroSTOXX 50 - a crude barometer of risk
aversion - down 1.4 percent on the day and near five-year lows
"We are still in the positive context ... The market has
more upside. A short-term correction is possible, the move from
November can have a small retracement between 2,600 and 2,550
(points on EuroSTOXX 50), that's the possible maximum
retracement, but this will not change the positive message of
the market at the moment," said Riccardo Ronco, head of
technical analysis at Aviate Global.
"I think 2,800, may be even 2,900, is a possibility."
He recommended positioning for any further gains by buying
financials, including Spanish and Italian names, while
avoiding retailers and energy companies.