DAX drags on European shares amid corporate gloom
* FTSEurofirst 300 down 3.92 points at 1,205.19.
* Dax down 0.7 percent as Deutsch Boerse misses f'casts
* France's CAC outperforms, LVMH results impress
* Financials drag on FTSE 100 ahead of banks' earnings
LONDON, July 26 (Reuters) - Germany's benchmark index led European shares lower on Friday as a spate of underwhelming company results helped it to underperform its southern European peers.
The DAX fell 0.7 percent to 8,244.91 and the FTSEurofirst 300 closed down 0.3 percent at 1,205.19, with investors unsettled this week by profit warnings from some of Germany's leading companies.
Deutsche Boerse fell 3.7 percent after its second-quarter earnings missed forecasts.
Steelmaker ThyssenKrupp shed 2.9 percent after a media report that late-stage talks over the sale of an unprofitable unit had hit a snag, while carmaker Daimler dipped 2.3 percent.
Starmine data showed 67 percent of German-listed companies have so far missed earnings expectations in the second-quarter with the remaining firms expected to miss forecasts by an average of 0.5 percent.
Despite the retreat, the DAX's two-year uptrend remains intact although the near-term support around 8,075 could be tested heading into the German elections in late September.
"A grand coalition including the SPD will open the door for more debt mutualisation, which will support peripheral countries," Roland Kaloyan, Asset Allocation Strategist at Societe Generale corporate and investment banking, said.
"We favour peripherals with preference for Spain over Italy and France over Germany," he said.
On Friday, France's CAC rose 0.3 percent to 3,968.84 with LVMH rising 3.6 percent after the luxury group joined rival Kering in pointing to an uptick in sales in the second quarter.
Spain's IBEX, up 0.9 percent, outperformed Italy's FTSE MIB, which was down 0.1 percent.
The FTSE 100 sagged too, testing support around the 6,544 level, which is the 61.8 percent Fibonacci retracement of the fall from May highs to June lows.
The UK's benchmark index was dragged down by heavyweight financials, which took off 7 points. UK lenders Lloyds Banking Group and Royal Bank of Scotland fell 0.4 and 3 percent respectively as Investec issued cautious notes on both banks ahead of earnings next week.
Lenders were also hit after UBS swallowed a $885 million settlement with a U.S. regulator over allegations the Swiss bank misrepresented mortgage-backed bonds during the housing bubble, paving the way for billions more to be paid by other banks.
Although results from Pay-TV operator BSkyB were initially well received by analysts, the company's shares fell 3.3 percent with traders citing profit taking after the 11 percent rise ahead of the numbers.
Engine maker Rolls Royce was the top faller, down 3.2 percent after Deutsche Bank cut its rating to "sell" the day after results.
Shares in publishing group Pearson, however, rose 6.1 percent to close just off 12-year highs after it announced the sale of its Mergermarket news service along with first-half results.