* FTSEurofirst 300 flat, Euro STOXX 50 up 0.2 pct
* Statoil rises after results beat
* Disappointing guidance pummels Sanofi
By Francesco Canepa
LONDON, Feb 7 (Reuters) - European shares were little
changed on Thursday after sharp falls the previous day, with any
recovery capped by mixed earnings and concerns about economic
and political developments in the euro zone.
Shares in Statoil rose 1.6 percent after the
Norwegian oil and gas group reported profits that beat
expectations and raised its dividend.
UK telecoms firms and market heavyweight Vodafone
rose 1.9 percent, with broker Liberum Capital highlighting
strong margins and a good performance at U.S. joint venture
They helped buoy up the pan-European FTSEurofirst 300 index
, which was flat at 1,152 points at 0902 GMT, offsetting
falls in French pharmaceutical group Sanofi, which
gave a disappointing outlook for this year.
The euro zone Euro STOXX 50 rose 0.2 percent to
2,621.72 points after shedding 33.86 points on Wednesday as
France and Germany aired their difference about the strength of
the euro currency.
The index was finding technical support after closing above
2,611 points, its May and September 2012 top in the previous
session, in a sign some investors were still prepared to buy on
"Investors are looking for things to be afraid of and at the
moment you have political issues," a German trader said.
"The (market) correction is already 80-90 percent over and
some people are already buying on the dips."
The trader said he expected the market to rally further,
helped by improving economic data in the euro zone.
But he said investors had become more selective after a 34
percent surge in the Euro STOXX 50 between June 2012 and last
month, and were looking to buy individual stocks rather than
sectors or indexes.
He was snapping up shares in construction group Hochtief
up 1.5 percent to 48.2 euros, after German newspaper
WAZ reported the group's new head is considering selling the
service and project development businesses.
Broader sentiment was more fragile, with investors fretting
that further euro strength could start hurting exporters and a
corruption scandal in Spain could cause political instability
and derail the country's efforts to keep control of its debt.
Investors will closely watch the results of a Spanish bond
auction at around 0940 GMT to see the impact of the uncertainty
on the country's borrowing costs.
The European Central Bank is seen holding interest rates on
Thursday, with the announcement due at 1245 GMT. But all eyes
will be on President Mario Draghi's press conference starting at
1330 GMT, where he was likely to face a grilling over the ECB's
sensitivity to the euro's recent sharp rally, as well as over an
Italian banking scandal.
Akshay Krishnan, senior research analyst for global macro
strategies at Stenham Asset Management, said investors were
likely to start worrying about the impact of a strong euro on
the region's exporters if the single currency, trading at around
1.356 against the dollar on Thursday, were to approach $1.40.
"(Our macro managers') view is if the Euro continues to
appreciate you might see clearer rhetoric from the ECB regarding
euro strength," he said
"...There is clearly a risk if either the ECB were to
disappoint or economic growth were to lag, you could see risk
assets fall, especially with the rally we've had."