* FTSEurofirst down 0.4 pct, Euro STOXX 50 down 0.8 pct
* Weak U.S. data casts shadow on best weekly gain in 5
* PPR drops 6.8 pct pct after sales miss
By Francesco Canepa
LONDON, April 26 (Reuters) - European shares fell on Friday
as some downbeat corporate results and disappointing U.S.
economic data cast a shadow, though a regional benchmark index
posted its best weekly gain in five months.
The pan-European FTSEurofirst 300 index closed 0.4 percent
lower on the day at 1,196.41 points but was still up 3.8 percent
for the week, its best performance in five months, on mounting
expectations that the European Central Bank will cut interest
rates next Thursday.
French fashion firm and luxury goods group PPR was
among the top losers - dropping 6.8 percent in volume three
times the average for the past 90 days, after its first-quarter
sales missed forecasts.
Bucking the trend was German chemical group BASF,
up 3.8 percent in three times its volume average after saying it
expects sales and operating profit growth in all its business
divisions this year.
Thomson Reuters StarMine data showed 51 percent of the
STOXX Europe 600 companies that have announced results
so far have missed analysts' forecasts.
The FTSEurofirst 300 extended losses in the afternoon as
data showed U.S. economic growth was lower than expected in the
first quarter, striking a cautious note ahead of the non-farm
payrolls report next Friday.
"Next week is probably when I'll make up my mind," said
Manish Singh, director and head of investment services at
Crossbridge Capital, who has positions in European financial and
"If we get a bad set of data then you have to cut your
positions because it could play into the crowd thinking of 'sell
in May and go away'."
The STOXX Europe 600 index has fallen by an average
0.80 percent in May over the past 10 years, data from brokerage
The index is up 0.6 percent so far this month and a positive
close would mark its ninth consecutive monthly gain, the longest
winning streak since 1996-97, strengthening the call for a May
correction according to traders.
Daily technical charts on the Euro STOXX 50,
down 0.8 percent at 2,683.43 points, showed the index was poised
for a strong end to the second quarter but the picture further
out was duller.
Philippe Delabarre, a technical analyst at Paris-based
Trading Central, said the Euro STOXX 50 was in a bullish
pattern, known as a descending broadening wedge, which tends to
be followed by a breakout to the upside.
He sees technical resistance at the index's March top at
2,740 points, which also corresponds to the upper limit of a
recent range and so could trap the index in the longer run.
"From a mid-term perspective, a consolidation channel is
taking shape," Delabarrre said.
RATE CUT BOOST
An interest rate cut by the ECB on Thursday, however, could
give new impetus to the rally by helping stimulate the
struggling euro zone economy and possibly ushering in a gradual
softening of Germany's stance towards southern European
"The real effect needs to be to get banks to lend, to
encourage government to work on stimulus measures and stop being
so completely focused on austerity," said Lorne Baring, managing
director of wealth manager B Capital in Geneva.
"That has started to happen. There is definitely a
relaxation process underway and that is what is needed to give
some back to European equities."
Crossbridge Capital's Singh cautioned this was unlikely to
take place before the German election in the autumn, when
Chancellor Angela Merkel will have to face the growing
opposition at home to concessions to Germany's southern partners
in the euro zone.
"I'm still playing safe in Europe but if you start to see
they move away from austerity and start reflation, clearly
Europe will do better because it has been underperforming for
the whole of the first quarter and second quarter," Singh said.
"It would be the theme for the second half of the year,
rather than now."