Europe stocks pause after four-day winning run

By Blaise Robinson PARIS, Nov 10 (Reuters) - European stocks were slightly lower around midday on Tuesday, pausing after a four-session winning run, as telecom shares dipped after disappointing Vodafone results and miners fell along with metal prices. But the drop was limited by strong gains in HSBC after the UK's biggest lender posted a reassuring update. Preferred shares in Volkswagen plummeted nearly 14 percent and ordinary shares fell 2.8 percent after Qatar Holding LLC (QH) said it plans to sell up to 25 million preference shares in Volkswagen, worth about 1.8 billion euros. At 1226 GMT, the FTSEurofirst 300 index of top European shares was down 0.1 percent at 1,010.79 points. Europe's benchmark index has risen about 4.3 percent over the past week, but remains down 2 percent from a 12-month high reached in mid-October. The broader DJ STOXX 600 was also slightly lower around midday, at 245.35 points. "The STOXX 600 is currently stuck in a range, with a support level at 241.79 and a resistance level at 250.46. But I'm cautious on the short term as we could soon get another correction phase," said Alexandre Le Drogoff, technical analyst at Aurel BGC, in Paris. "If the 20-day moving average and 50-day moving average cross each other, it would mean that the recent trend reversal has more legs. This is something we're keeping an eye on." The two moving averages for both the DJ STOXX 600 and the FTSEurofirst 300 have moved closer to each other over the past few weeks, as the stock market's strong eight-month rally lost steam. Investors were also cautious after the German ZEW economic think tank's monthly poll showed German analyst and investor sentiment declined by more than expected in November, dropping to its lowest level in four months. Banking stocks inched higher, as HSBC rose 4.4 percent after saying its underlying third-quarter profit was significantly ahead of a year ago and losses on U.S. consumer loans had shown their first fall in three years. Deutsche Bank rose 0.7 percent, Intesa SanPaolo gained 2.1 percent, BBVA added 1.1 percent. Shares in Barclays, which said strong investment banking helped limit a fall in profit in the third quarter, dropped 3.8 percent on concerns the investment bank will be unable to sustain its growth and is seeing costs rise. "While its investment banking division reported well, we are not likely to see the same sort of performance from BarCap in coming months," said Manoj Ladwa, senior trader at ETX Capital in London. Shares in Vodafone, the world's largest cellphone operator, fell 3.5 percent as a 2.1 percentage point decline in the group earnings margin, due to tough competition in emerging markets such as India and a turnaround plan in Turkey, rattled investors. Energy and mining shares came under pressure as commodity prices retreated. Anglo American was down 2 percent and Xstrata down 2.5 percent, while BG Group fell 0.7 percent and Total dropped down 0.6 percent. Around Europe, the UK's FTSE 100 index was up 0.2 percent, Germany's DAX index flat and France's CAC 40 down 0.1 percent. AXA gained 3.1 percent as traders cited a flurry of positive analyst notes a day after the French insurer revealed a proposal to get full control of the Asian assets of its arm AXA Asia Pacific. Alcatel-Lucent dropped 4 percent after Exane cut its recommendation on the stock to "neutral" from "outperform" and credit rating agency Standard & Poor's lowered its long-term corporate credit rating. (Editing by Erica Billingham) Keywords: MARKETS EUROPE STOCKS ============================================================= For rolling updates on what is moving European shares please click on ============================================================= For pan-Europeanmarket data and news, click on codes in brackets: European Equities speed guide................... FTSEurofirst 300 index.............................. DJ STOXX index...................................... Top 10 STOXX sectors........................... Top 10 EUROSTOXX sectors...................... Top 10 Eurofirst 300 sectors................... Top 25 European pct gainers....................... Top 25 European pct losers........................ Main stock markets: Dow Jones............... Wall Street report ..... Nikkei 225............. Tokyo report............ FTSE 100............... London report........... Xetra DAX............. Frankfurt market stories CAC-40................. Paris market stories... World Indices...................................... Reuters survey of world bourse outlook.......... Western European IPO diary........................... European Asset Allocation......................... Reuters News at a Glance: Equities............... Main currency report:............................... Keywords: MARKETS EUROPE STOCKS/ =2 ([e-mail] ; [phone], Reuters Messaging: [e-mail]) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved.

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