* FTSEurofirst 300 index steadies
* Nokia down as loses market share
* GDF Suez drops on stake sale
By Atul Prakash
LONDON, May 14 (Reuters) - European shares steadied near
five-year highs on Tuesday after early losses, with charts
pointing to further upside and improving U.S. economic
fundamentals lifting the outlook for many European companies.
At 1213 GMT, the FTSEurofirst 300 index of blue
chip European shares was flat at 1,231.44 points, after falling
0.2 percent in the previous session.
The index touched a five-year closing high on Friday and is
up 8 percent this year on encouraging U.S. data and persistent
liquidity support from central banks.
"I don't think it's the beginning of a correction. The
market is just taking a break to consolidate, but there is no
major deterioration in the fundamentals," Daniel McCormack,
strategist with Macquarie, said.
"We had a weak reporting season and it's remarkable how well
the market has done through that period. The medium-term outlook
is excellent. The equity risk premium is still way too high and
I expect a lot of upside on a one- to three-year view."
The euro zone blue chip Euro STOXX 50 was up 0.1
percent at 2,780.14 points and charts suggested the index was
poised to set new highs after a short period of consolidation.
"The index will make a new attempt to continue its recent
upward journey as moving averages are rising and overall
technical condition remains supportive," Petra von Kerssenbrock,
technical analyst at Commerzbank, said.
The index's 50-day, 100-day and 200-day moving averages have
risen since late April and it still trades within a trend
channel that has been in place since the middle of last month.
It could face some strong resistance on the upside though.
"The Euro Stoxx 50 index has fallen from a high ... 2,807 is
the 76.4 percent Fibonacci retracement of the wave down in 2011
and represents strong resistance," Murray Gunn, head of
technical analysis at HSBC, said.
"Also, volume has been contracting as the rally has unfolded
over the last couple of weeks. A drop below 2,745 would be the
first sign that a significant top was in place."
Among individual movers, Jeronimo Martins dropped
6.2 percent after a subsidiary of Heerema Group said on Monday
it was selling a stake of up to 5 percent in the retailer.
Deutsche Post rose 2.6 percent after the company
reported better-than-expected quarterly results.
United Utilities climbed 3.6 percent after peer
Severn Trent confirmed it had received a takeover
approach from a consortium. Severn Trent surged 14.5 percent.
Nokia dropped 4.2 percent after losing some
market share in the first quarter, according to research company
Gartner, while gas and power utility GDF Suez fell 2.5
percent after Groupe Bruxelles Lambert said it had launched the
sale of a 2.7 percent stake in the company.
Shares in Commerzbank tumbled 3.2 percent on news
the Germany's second-largest lender is offering shares at a deep
discount in a capital hike.
Analysts advised against building a strong cyclical
portfolio saying the economic environment in Europe was still
challenging. Investors could consider buying defensives like
consumer staples and pharmaceuticals, they said.
The poor economic situation in the euro zone was highlighted
by the Mannheim-based ZEW think tank, which said German analyst
and investor sentiment edged up much less than expected in May.