* FTSEurofirst 300 down 0.4 pct
* Ryanair drags down airlines after profit warning
* Italian bourse at 1-week lows on political jitters
By Toni Vorobyova
LONDON, Sept 4 (Reuters) - European shares edged lower on
Wednesday, with Italian stocks hit by domestic political
uncertainty while airlines suffered from a profit warning by
Ryanair and the risk of higher oil prices in case of an
attack on Syria.
U.S. President Barack Obama won backing for a Syria strike
from key Congress figures. Russia did not rule out agreeing to
military action if Damascus were proven to have carried out a
chemical weapons attack.
Analysts at Societe Generale estimate that losses for the
broader equity market will be limited unless crude prices spike
to $150 - from around $115 now - although oil-dependent
sectors like transport are likely to feel the pain sooner.
The airlines sector is still hurting from the European
economic slowdown, as highlighted by Ryanair's warning of weak
bookings. The company also forecast that Europe's airline market
will be weaker than generally expected in coming months.
Shares in Ryanair dropped 12.6 percent, dragging down other
airlines and making the STOXX Europe 600 Travel Index the worst-
performing sector, off 2.3 percent.
"It was a shock profit warning, we are seeing one-way
traffic flow of aggressive sellers and opening sellers," said
Jordan Hiscott, trader at Gekko Global Markets.
"Uncertainty over a high oil price will mean further pain
for under-pressure profit margins for any budget airline ...
I've seen a lot of risk taken off the board simply because of
the uncertainty surrounding Syria."
Among Europe's regions, meanwhile, Italy was the hardest
hit, with the FTSE MIB down 1.9 percent at one-week
lows on renewed uncertainty over the survival of the government.
Some Italian papers said on Wednesday Silvio Berlusconi, who
faces possible eviction from the Senate following a tax fraud
conviction, was considering pulling the plug on the coalition
government led by Enrico Letta.
The weakness in the airlines and the Italian shares combined
to see the pan-European Eurofirst 300 index fall by 0.4 percent
at 1,207.25 points by 0956 GMT.
The VSTOXX implied volatility index - seen as a crude
barometer of investor risk aversion - rose 2.8 percent.
"If you are afraid of the war in Syria, you should buy
out-of-the money put options on equities and out-of-the money
call options on oil and volatility," said Peter Garnry, equity
strategist at Saxo Bank.
Indeed, there was strong demand for put options - which give
the right to sell the index at a pre-set price and are thus used
to position for market weakness - on the EuroSTOXX 50. For Sept.
20 expiry, strikes in the 2,625-2,675 points range were most
popular, implying a fall off up to 4 percent from now.
In the near term, though, the index's losses would likely be
capped by its 100-day moving average around 2,728 points
, with the latest moves seen as a continued
consolidation of the market's strong June-August rally, said
Petra Kerssenbrock, technical analyst at Commerzbank.