* FTSEurofirst 300 up 0.05 percent
* Alcoa, Volkswagen fan Q1 earnings concerns
* Miners, worst sector this year, rebound on China data
By Toni Vorobyova
LONDON, April 9 (Reuters) - European shares finished broadly
steady on Tuesday, with concerns about a weak first-quarter
earnings season outweighing a rally in miners on prospects for
continued strong metals demand from China.
The pan-European FTSEurofirst 300 closed up 0.05
percent at 1,165.35 points, retreating from a session high of
1,172.07 in afternoon trade after a muted start on Wall Street
Sentiment was hurt by an unexpected sell-off in U.S.
aluminium giant Alcoa, which traditionally kicks off the
global reporting season, as investors overlooked
forecast-beating earnings to focus instead on weaker revenues.
Weak demand in Europe was a key drag on Alcoa's results, and
also hurt March sales at Volkswagen, with shares in
the German carmaker dropping 2.6 percent.
The early numbers suggest that first-quarter results are
unlikely to feature any strong pick-up in European corporate
earnings, which analysts say is needed if the equity rally -
started by central bank stimulus last summer - is to continue.
"As Alcoa has shown, the disappointment on the revenue side
clearly underpins that the dynamics for earnings growth are
rather weak ... (and) there will still be downward revisions for
2013 and 2014 earnings," said Gerhard Schwarz, head of equity
strategy at Baader Bank.
"We are currently in quite a fragile situation. I think,
however, that this is a digestion phase for the market, it's not
the start of a bigger downward move. We need to see more
confirmation that the hard economic data is firming, and I think
this will be delivered in the second quarter."
STOXX Europe 600 companies are forecast to post a 7.4
percent drop in first quarter profits, year-on-year, according
to Thomson Reuters StarMine data.
Miner Vedanta Resources will be next to shed the
light on the performance of the first three months of 2013,
reporting production results on Wednesday.
Starmine SmartEstimates - which focus on the top analyst
predictions based on past accuracy and timeliness of forecasts -
suggest Vedanta could miss expectations by some 19 percent on
12-month earnings for the year to end-March.
On Tuesday, though, Vedanta added 5.3 percent, cashing in on
a broad-based rally in miners.
The worst performing sector so far this year - with losses
of around 15 percent - took heart from Chinese data
showing that inflation cooled in March, leaving room for
monetary policy to remain easy and thus likely supported future
demand for metals from the world's top consumer.
The gains helped the STOXX Europe 600 basic resources index
recover from oversold territory based on the 7- and 14-day
relative strength indicators.
On a regional basis, too, investors focused on some of the
2013 laggards, with Spain's IBEX adding 1.1 percent and
Italy's FTSE MIB up 1.3 percent, while the recently
strong German DAX shed 0.3 percent to 7,637.51 points.
The DAX had been on track to be the first of the major
European bourses to recover back to its 2007 highs. But concerns
about the future of the euro zone - fanned by an Italian
election stalemate and the Cyprus bailout - have pushed the
German benchmark back below the psychologically key 8,000 mark.
"The charts are not that bright," said Valerie Gastaldy,
technical analyst at Day By Day. "I do not think we will go back
above 8,000 for several days and even weeks."