European shares lower on poor Q3 earnings view

LONDON, Oct 12 (Reuters) - European shares fell on Friday onpersistent concerns about the outlook for the third-quarterearnings season that is expected to keep regional markets withina tight near-term range.

At 0709 GMT, the FTSEurofirst 300 index of topEuropean shares was down 0.4 percent to 1.094.81 points. Theindex is down 1.5 percent so far this week on the earningsworries, but analysts said the market was not likely to fallsharply and would continue to trade in a range.

"It's not going to be a great earnings season but there aregood reasons not to be too worried about it. I thinkdisappointments will be contained to some degree on the basisthat labour costs have been falling and expectations have beenlowered quite considerably," Graham Bishop, senior equitystrategist at Exane BNP Paribas, said.

"We think valuations are supportive. We are sticking to ourpro-cyclical bias," he said, adding the market was in a holdingpattern after a good summer run and was looking for catalystssuch as more clarity on the U.S. "fiscal cliff" of spending cutsand tax rises to break the current trading range.

(Reporting by Atul Prakash; editing by Simon Jessop)

((atul.prakash@thomsonreuters.com)(+44 20 7542 6189)(ReutersMessaging: atul.prakash.thomsonreuters.com@reuters.net))