* FTSEurofirst down 0.3 percent
* Anglo American leads miner lower on strike worries
* Auto retreat as European car market shrinks
* Telecoms mixed after DB sees no Q4 earnings catalyst
By David Brett
LONDON, Jan 16 (Reuters) - Europe's top shares opened lower
on Wednesday as investors continue to consolidate gains with
indexes around mutli-month highs and near technically
"overbought" territory, while sovereign risks remain a cloud on
By 0832 GMT, the FTSEurofirst 300 was down 2.87
points, or 0.3 percent, at 1,157.35, lingering near 22-month
highs but with the index flatlining in the short-term term
having hit "overbought" territory just over a week ago.
The euro zone blue chip index has stalled too
around 18-month highs awaiting further catalysts to drive
further a rally which has seen shares gain more than 30 percent
Mark Pignatelli, Smith & Williamson European Growth Trust
fund manager, said sovereign risks and Europe's recession
continue to keep a leash on the market, but an end to both in
the coming months could drive the next leg of the equity rally.
"PMIs are still in recessionary territory but they are
improving... Over the next few months investors will look
through the bottom of the trough and recognise that equities are
perfectly solvent assets in a environment which is not growing
fast but is ok," he said.
Pignatelli said within the market he is looking to buy large
cap value and financials and avoid the comfort zones such as
the personal and household goods sector.
On Wednesday, however, miners were the main drag on
the FTSEurofirst 300 with Anglo American down 3.2
percent, tumbling from 5-month highs, hit by worker unrest at
its platinum mines which analysts warn could hamper an overhaul
effort aimed at reversing losses there.
South Africa's Kumba Iron Ore, a unit of global mining
company Anglo American, said its full-year profit likely fell by
about a third, hit by lower export prices and an illegal strike
at its main mine.
Auto-related firms fell after data showed Europe's
new car market shrank in December at its fastest monthly pace
since October 2010, closing a year burdened by heavy declines in
all major euro zone economies.
Telecoms floundered as Deutsche Bank warned that
despite European telcos under-performing the market by 19
percent in 2012, upcoming fourth-quarter results are unlikely to
offer many reasons to be too optimistic.
The investment bank downgraded mobile telecoms firm Vodafone
, which fell 1 percent, to "hold" from "buy" on concerns
over deteriorating growth and cash returns.
Deutsche prefers Dutch telecom company KPN, which
was the biggest riser in Europe up 1.6 percent, and Greek firm
OTE, both of which the investment bank upgraded to
"buy" from "hold".
Retailers were mixed with the UK's Tesco one of the
worst-performers on Britain's benchmark FTSE 100 index,
with traders attributing its decline to negative sentiment on
the stock after the supermarket retailer withdrew a number of
beef burgers from sale after samples were found to contain horse
DNA in tests.
German retailer Metro, meanwhile, added 1.5
percent after it announced the end to its consumer electronics
plans in China as it reported a 0.5 percent rise in fourth
Healthcare firms, a traditional safe haven when
market is in retreat, were the top risers with sector a
favourite among many investors for its dividend growth outlook.
The sector yields around 4 percent with prospect of more
compared with other asset classes such as "safer" government
bonds and cash which offer low yields close to 2 percent and