* FTSEurofirst 300 down 0.5 percent
* Growth worries hamper oils and miners
* Engineers hit by profit warning
* STMicroelectronics rallies on break-up talk
By David Brett
LONDON, Oct 12 (Reuters) - European blue chip shares ended
the week in negative territory with weakness in commodity stocks
outpacing gains in healthcare and consumer staples.
The FTSEurofirst fell 5.47 points, or 0.5 percent
to 1,093.33, paring the previous session's gains but staying
within the tight 20-point range in place since Sept. 26.
The uptrend in the index that began in June fuelled by
central bank stimulus and relatively cheap valuations has just
about remained in tact, but global growth concerns are now
The FTSEurofirst 300 has hovered in a band of about 50
points since early August after the European central Bank
announced it would do what it takes to save the Euro and an even
tighter range since the U.S. Federal Reserve unveiled QE3 in
"There are still some very large problems out there and
although the recent central bank actions will support prices it
does not really solve the underlying problems, and the debt and
lack of growth will be with us for a really long time," Peter
Clark, chief strategist at Ingenious Asset Management, said.
Equities have suffered from the law of diminishing returns
from stimulus measures. Having risen 80 percent after QE1,
equities returned 29 percent post QE2 and just 17 percent
following QE3, according to data from FTSE.
Clarke is cautious on cyclical stocks such as miners and
banks, but is gradually increasing exposure to top quality
equities that are managing to inch profits and dividends higher.
"We are hunting with a rifle rather than a shotgun," he
The FTSEurofirst's least-favoured sectors remain those where
investors are struggling to get a grasp on their earnings
Major oil companies continue to lag, while basic
resource stocks are down 1.6 percent in 2012.
Credit Suisse lowered its earnings per share estimates for
the major mining companies by 15-40 percent on Friday although
it is cyclically positive on the sector, seeing growth momentum
improving over the next six months.
Kazakhmys and Anglo American, two of Credit
Suisse's least-preferred stocks in the sector, fell 4.1 percent
and 1.7 percent respectively on Friday.
Antofagasta shed 3.6 percent after HSBC downgraded
the miner to "underweight" from "neutral".
Commodity stocks were not the only sectors suffering from
A profit warning from UK-listed advanced materials group
Morgan Crucible, echoing Cookson's recent
warning, weighed on engineering shares.
UK blue chip engineers GKN and IMI dropped
3.3 percent and 2.3 percent respectively.
AkzoNobel tumbled 6.1 percent with the Dutch
paints maker's Chief Executive Ton Buechner still on medical
leave, dashing analysts' hopes for a quick turnaround at the
Saipem shed 5.6 percent after Nomura cut its
rating on the Italian oil services company to "neutral" from
"buy" on a reduced earnings per share outlook.
And concerns over future earnings saw German chemicals firm
Lanxess drop 4.4 percent, as Barclays and Credit
Suisse cut their respective recommendations on the company.
Elsewhere, M&A talk fueled interest in PSA Peugeot Citroen
, which rose 2.3 percent after a report in La Tribune
said the French carmaker is working on plans with General Motors
for a European joint venture.
STMicroelectronics rallied more than 17 percent at
one stage on a report that Europe's top semiconductor maker was
considering a breakup. It pared gains towards the close to
finish 6.4 percent higher after the report was quickly denied by