Egypt turmoil hits travel firms as European shares flatline
* FTSEurofirst 300 up 2.34 points at 1,230.13
* Egypt violence dents outlook for travel firms
* Fed tapering concerns holding markets back
* Traders eye longer-term gains for European shares
LONDON, Aug 16 (Reuters) - European shares endured a choppy session on Friday with travel firms worst hit due to the turmoil in Egypt, while concerns that the United States could soon start to scale back stimulus kept the broader market in check.
Violence in Egypt this week forced Thomas Cook Germany to cancel all trips to the country up until Sept. 15 after Germany extended its travel alert to Red Sea resorts.
"With all the turmoil in the Middle East, especially in Egypt, travel shares have been hit hard over the last few days after their fantastic run over the past 12 months," Ronnie Chopra, a strategist at TradeNext, said.
"The current situation is the perfect catalyst to take profits," he said.
The travel sector fell 0.3 percent. German airline Lufthansa dropped 1.5 percent, weighed down in addition by Morgan Stanley downgrading the stock to "equal-weight" from "overweight".
Travel firms were not the only companies affected by the violence in Egypt.
Cement group Italcementi shed 4 percent amid concerns it may be affected by continued unrest in the North African country as it owns Egypt's biggest cement maker by market value, Suez Cement <SUCE.CA.
The pan-European FTSEurofirst 300 index, which fell 1 percent on Thursday in its biggest one-day drop in six weeks, was up 2.34 points at 1,230.13 by 1446 GMT. It was flat on the week.
MAERSK SHARES JUMP
Global equity markets have struggled for momentum over the last month on the view that the U.S. economy might be strong enough for the Fed to start scaling back its stimulus programme in September.
Several traders, however, expect the market will rebound after a possible pullback in the next month.
Michel Juvet, chief investment officer at Swiss bank Bordier, said that while he felt the U.S stock market was set for a pullback, he remained more confident over the prospects for European equities.
Key European indexes have lagged U.S. indexes. The Dow Jones and S&P have risen 15-17 percent since the start of 2013, while the FTSEurofirst 300 and Euro STOXX 50 have risen 8 percent.
Juvet said that even if the Federal Reserve tapers its economic stimulus as the U.S economy continues to strengthen, the European Central Bank (ECB) would maintain loose monetary policies to help the euro zone economy.
"In the U.S., we have all the signs that the market has overheated. But for me, Europe is different. There is no ECB tapering in view," he said.
Big banks rebounded after recent weakness, while heavyweight stocks such as Maersk kept European shares steady on Friday.
Container shipping fleet operator Maersk rose 9.1 percent after posting higher second quarter profits.
The STOXX Europe 600 index rose 0.2 percent to 306.5 points and the euro zone's blue-chip Euro STOXX 50 index - which hit a two-year high this week at 2,855.89 points - was up 0.5 percent at 2,849.21 points.
"The Euro STOXX 50 hit a high two days ago. After that, any negative factor will be blown out of proportion. We're probably overdue for a minor correction but we're still in a bull market," Andreas Clenow, hedge fund trader and principal of ACIES Asset Management said.
Flows into European equities from U.S.-based funds hit a two-month high in the week ended Aug. 14, data from Thomson Reuters Lipper service showed, signalling steady investor appetite for the region's stocks.