Sanofi sends European shares to 2013 closing lows

* FTSEurofirst 300 falls 0.3 pct to 2013 closing low
* Euro STOXX 50 falls 0.7 pct to 2,597.92 points
* Sanofi slumps after warning of possible earnings fall
* Market fall likely to be short-lived, buying on dips seen

By Sudip Kar-Gupta
LONDON, Feb 7 (Reuters) - Two leading European equity
indexes fell to 2013 closing lows on Thursday, hit by a fall in
drugmaker Sanofi after disappointing results and on
persistent concern over the economic outlook.
Still, many investors expected the market's decline to be
relatively short-lived and shallow, with funds still looking to
put money into higher-yielding stocks rather than bonds.
The pan-European FTSEurofirst 300 index closed down
0.3 percent at 1,148.28 points, its lowest close since Dec. 31.
The euro zone's blue-chip Euro STOXX 50 index
fell 0.7 percent to 2,597.92 points, its worst finish since
early December.
European Central Bank (ECB) head Mario Draghi said economic
weakness would continue to afflict the region, hit by a debt
crisis, in the early part of 2013 and some traders took this as
a cue to sell.
"I think we have another two to three percent fall to take
place on European equities over the next few weeks," said
Clairinvest fund manager Ion-Marc Valahu.
"But I'm not expecting another major downwards movement. I'm
just expecting us to consolidate for another two to three
weeks."

SANOFI SLUMPS
The Euro STOXX 50 rose some 30 percent between June 2012 and
January this year, on expectations that a pledge last year by
Draghi to protect the euro currency from the region's sovereign
debt crisis had reduced the risk of a major economic implosion
in Europe.
Since then, many investors have been looking for reasons to
sell shares to bank profits on the back of that rally, and
lacklustre corporate earnings and persistent fears over Europe's
anaemic economy have led some to sell off equity holdings.
French drugmaker Sanofi highlighted the mixed set of
corporate results from Europe's top companies so far, warning
that its earnings could fall this year.
That sent its shares down by 4 percent and took the most
points off the FTSEurofirst 300, subtracting 0.77 points from
the index.
In contrast, shares of Norwegian bank DNB surged
7.3 percent to top the FTSEurofirst 300 leaderboard after the
bank posted higher-than-expected profits.
According to Thomson Reuters Starmine data, 38 percent of
the companies to have so far reported earnings on the
pan-European STOXX 600 index have missed market
expectations.
Francois Savary, chief investment officer at Swiss bank
Reyl, was waiting for European stockmarkets to decline a bit
further before buying back into them, adding he would buy into
the Euro STOXX 50 if it fell to 2,545 points.
"We are waiting for more consolidation to take place in
February," said Savary.
Several traders expected European equity markets to trade
sideways in February, due to uncertainty over the outcome of
Italian elections this month, but then resume an upwards
trajectory towards the end of the first quarter.
Mirabaud Securities' European equity sales executive Rupert
Baker said investors were still buying shares "on the dip" at
relatively cheap prices on days when stockmarkets fell, which
would help prevent any bigger drop on equity markets.
"People will still buy the dips," he said.