* FTSEurofirst 300 down 0.3 percent
* RWE weakens on dividend cut
* Adidas drops on profit warning
* Europe stocks see 3rd best weekly inflow on record -Lipper
By Tricia Wright
LONDON, Sept 20 (Reuters) - European shares shed some of
their gains from the U.S. Fed's decision to keep its stimulus
programme in place but still ended up for their third straight
The FTSEurofirst 300 closed down 0.3 percent at
1,262.61 points on Friday, having hit its highest level since
mid-2008 in the previous session.
The euro zone's blue-chip Euro STOXX 50, which
on Thursday rose to a level not seen since mid-2011, slipped 0.3
percent, while Germany's DAX, off 0.2 percent, fell
back from fresh all-time highs reached in the previous session.
Germany's No. 2 utility RWE AG was among the
biggest losers across Europe, down 3.9 percent, after it slashed
Adidas also came under pressure, dropping 3
percent after the German sports apparel maker warned on its 2013
Equity markets took a leg down on Friday after St. Louis
Federal Reserve President James Bullard told Bloomberg
television that a slowing of asset-purchases in October was
possible depending on incoming data.
But analysts say that while a lack of clarity over when U.S.
stimulus will be scaled back could unleash volatility into the
markets, they remain bullish on European equities given
improvements in the global growth picture.
"The end result of everything that (the Fed has) achieved is
just to introduce an added source of uncertainty... We are
scrambling to put months to the eventual introduction of
tapering," Ian Richards, head of equity strategy at Exane BNP
"I think yesterday's sugar rush was misplaced but ultimately
I don't think this materially changes the investment case."
Goldman Sachs, in a note, says it believes that global
growth will continue to accelerate through 2014, something it
expects to translate into strong earnings growth for the market.
Germany's DAX looks attractive in this context, the
investment bank says, noting that it tends to have higher
operating leverage than the market and "should therefore gain
more as global growth improves".
The DAX trades on a 12-month forward price/earnings ratio of
11.5 times, against the STOXX Europe 600 on a 12.9
times 12-month forward PE, Thomson Reuters Datastream shows.
Flows into European equities from U.S.-based funds
accelerated in the week ended Sept. 18, according to Lipper
data, with the region's stocks enjoying their third-biggest
weekly net inflows since Lipper started to track the data in
"I wouldn't expect that the asset reallocation and the fund
flows which have increasingly focused on Europe will retrace or
diminish over the coming months," Richards said.
Some technical analysts anticipate some short-term
consolidation on the Euro STOXX 50 as it bridges a gap made on
Thursday, but from there expect the index to resume the rally
which has seen it jump 7.5 percent from late August lows.
Barclays Capital technical analyst Lynnden Branigan reckons
the index could drift towards 2,909, the bottom of the gap, in
the coming days, but if it follows this with a higher close,
there is "room for that trend to extend to the upside".
His immediate target is around 2,955, Thursday's high, and
longer term at the May 2011 highs at about 3,000.