4 Min Read
* STOXX down 0.1 pct
* Banks pull back, miners biggest sectoral fallers
* Pain maker Akzo drops after new offer rejected
* PostNL, Tod's slump as earning updates disappoint
* Euro zone investor morale up (Adds details, updates prices)
By Danilo Masoni and Helen Reid
MILAN/PARIS, May 8 (Reuters) - European shares briefly hit fresh highs on Monday before dipping into the red, pulled lower by banks and resources-related stocks, as the widely anticipated result of the French presidential vote spurred some profit-taking.
The pan-European STOXX 600 index was down 0.1 percent, while France's CAC fell 0.6 percent after hitting its highest levels in more than 9 years. The German DAX was down 0.2 percent after touching a new all time high.
Centrist Emmanuel Macron was elected French president with a business-friendly vision of European integration, defeating his far-right rival Marine Le Pen who threatened to take France out of the European Union.
"The market had already strongly rallied into this election," said JP Morgan global market strategist Emmanuel Cau. "We've cut a little bit of risk, specifically in the capital goods and chemicals sectors."
Banks, which are more sensitive than other sectors to political factors, also turned negative. The euro zone bank index fell 0.7 percent after earlier hitting its highest since November 2015.
French banks BNP Paribas and Societe General fell 1 percent and 2.7 percent respectively.
Some market participants have speculated that a Macron win could be the last piece of the puzzle for the European Central Bank to begin rolling back from its ultra-loose monetary policies. Banks have been penalised by ultra-low interest rates and possible tightening measures by the ECB could help ease pressure off their margins.
In spite of the Monday's weakness, investors remained upbeat about prospects for European equities, which have started to outperform U.S. and British peers on the back of one of the best earnings season in many years and bright macro data.
JP Morgan's Cau said the French election result could still boost inflows into European stocks and make the region more investable in the medium term.
On Monday, a survey showed that investor sentiment in the euro zone hit its highest level in almost a decade in May, improving more than expected thanks to a strong assessment of the current economic situation and expectations that political uncertainty will diminish.
There were also some earnings updates to drive price action on Monday, some of which fell short of market expectations.
PostNL fell 7.9 percent after revenue growth at the Dutch postal firm missed expectations in the first quarter, while a weak first-quarter and a broker downgrade sent Italian luxury goods makers Tod's down 8 percent.
The picture for earnings however remained strong. According to Thomson Reuters data about half of the European companies have reported results so far with 72 percent beating expectations and 7 percent meeting them. First quarter earnings growth is seen at a healthy 17.6 percent.
Shares in Akzo Nobel fell 2.4 percent after the Dutch paint maker rejected a third takeover proposal from larger U.S. rival PPG Industries. It said the 26.9 billion euros proposal undervalued the company, faced antitrust risks and does not address other concerns such as "cultural differences". (Editing by Jeremy Gaunt)