Tech stocks underperform as U.S. deadlock dents Europe shares
* Euro STOXX 50 down 0.1 pct, FTSEurofirst 300 flat
* Ericsson and Dassault Systemes fall, hitting tech sector
* U.S. stalemate pegs back European equity indexes
* Most investors still expect eventual U.S. debt deal
LONDON, Oct 14 (Reuters) - Falls in Ericsson and Dassault Systemes hit technology stocks on Monday, as a lack of concrete progress in resolving a U.S budget deadlock held back European shares.
The euro zone's blue-chip Euro STOXX 50 index slipped 0.1 percent to 2,971.46 points while the pan-European FTSEurofirst 300 index was flat at 1,250.63 points.
The STOXX Europe 600 Technology Index was the worst-performing European equity sector, falling 1.2 percent after being dragged lower by a 2.7 percent drop at wireless networks group Ericsson and a 9.5 percent slump at Dassault Systemes.
Ericsson was hit by a ratings downgrade by Barclays, while Dassault, a software and consulting group, fell after warning that lower than expected orders would hit revenue growth.
European equities were also held back by continuing stalemate in Washington over a new federal budget or raising the $16.7 trillion U.S. debt ceiling, which Treasury Secretary Jack Lew said the government would hit no later than Oct. 17.
Even though most investors expect an eventual resolution, some have used the uncertainty to sell shares to cash in on the rally so far this year, with the FTSEurofirst 300 up 10 percent since the start of 2013 and the Euro STOXX 50 up 13 percent.
Andrea Williams, European equity fund manager at Royal London Asset Management, said she had trimmed back some equity holdings over the last month.
She added that revenue and profit warnings from the likes of Dassault Systemes and Unilever were a further reason to have sold off some equity positions.
"We've raised a bit of cash. We're a little bit concerned about the forthcoming results season, as shown by the Dassault Systemes warning today," said Williams.
Cyrille Urfer, head of asset allocation at Swiss bank Gonet, remained optimistic that politicians would reach a deal to raise the U.S. debt ceiling, which would in turn give another leg-up to European shares.
"I cannot believe that they will not find a solution. At the least, they can push the can down the road again for a couple of months," he said.
"There will be volatility, but volatility means opportunities and Europe has been an interesting place to invest over the last couple of months."