* FTSEurofirst 300 index ends flat after losses
* Miners slip on disappointing Chinese factory data
* Randstad slumps, warns of only gradual improvement
* BAE Systems slips after warning on earnings
By Atul Prakash
LONDON, Feb 20 (Reuters) - European shares recouped early
losses to end flat on Thursday, helped by a rally in U.S.
equities after strong manufacturing data, but sentiment remained
fragile and miners slipped on disappointing data from China.
Shares on Wall Street rose 0.4 to 0.6
percent after February data showed U.S. manufacturing activity
accelerated at its fastest pace in nearly four years, prompting
investors in Europe to snap beaten-down stocks in late trade.
But overall sentiment remained jittery following poor data
from China, France and the U.S. mid-Atlantic region. Investors
were also rattled by the minutes of the U.S. Federal Reserve's
meeting indicating the central bank might keep trimming its
The European basic resources index fell 1.1 percent
to the bottom of sectoral losers after China's flash Markit/HSBC
Purchasing Managers' Index fell to a seven-month low of 48.3 in
February, suggesting a manufacturing contraction in China, the
world's top metals consumer.
"While we expect the recovery to continue during the course
of this year, the market remains volatile in the near-term as
investors are nervous on the back of the U.S. tapering story,"
Henk Potts, equity strategist at Barclays Wealth, said.
"Chinese PMI data has been disappointing, but ... long-term
fundamentals for China remain good and we are still talking
about 7 to 8 percent growth per annum over the course of the
next five years."
Some other cyclical sectors lost ground, with the industrial
goods and services index falling 0.7 percent, led lower
by Europe's biggest defence contractor BAE Systems.
BAE shares fell 8.3 percent after the company warned its
earnings could drop by up to 10 percent this year as a result of
U.S. spending cuts.
"TAKING STEP BACK"
Dutch staffing company Randstad fell 10.5 percent
to make it the worst-performing FTSEurofirst 300 stock
in percentage terms because the company expects only a gradual
improvement in the current quarter due to the patchy nature of
the fledgling global economic recovery.
"The economic numbers are mixed. People are taking a step
back and waiting for more visibility on the global economy
before going back in to push markets higher," said Francois
Savary, chief investment officer at Swiss bank Reyl.
The FTSEurofirst 300 closed flat at 1,338.77 points after
falling as low as 1,324.36, the lowest in a week, after hitting
its highest since late January on Wednesday. Germany's benchmark
DAX shares index, however, fell 0.4 percent.
Darren Courtney-Cook, head of trading at Central Markets
Investment Management, saw some weakness in European equity
markets in the coming sessions.
"We've had bad Chinese data and the very fact that there is
chatter about the Fed changing its guidance on rates is also
weighing on sentiment," said Courtney-Cook, who said he had sold
positions on Germany's DAX futures contract at 9,700
points before buying back in at 9,500 points.
Toby Campbell-Gray, head of trading at Tavira Securities,
also expected European shares to fall in the next few sessions
but remained more bullish longer-term over 2014, and Reyl's
Savary said equities remained his preferred asset class.
"I do see the market as being a little bit softer in the
next few days but I would use days like this to pick up quality
stocks," said Campbell-Gray.