* STOXX down 0.2 pct
* Banks pull back, miners biggest sectoral fallers
* In France, small-caps outperform blue chips
* PostNL, Tod's slump as earning updates disappoint
* Euro zone investor morale up
(Adds details on French stocks, updates prices)
By Danilo Masoni and Helen Reid
MILAN/PARIS, May 8 European shares dipped after
a relief rally on the widely anticipated victory of pro-business
candidate Emmanuel Macron in the French presidential election.
While investors welcomed Macron's win, they said his ability
to deliver reforms depended on securing a strong enough majority
in parliament in legislative elections in June.
The pan-European STOXX 600 index was down 0.2
percent, while France's CAC fell 0.9 percent after
hitting its highest levels for more than 9 years. Germany's DAX
dipped 0.2 percent after touching a new all-time high.
Macron defeated the National Front's Marine Le Pen, who had
threatened to take France out of the European Union.
"The market had already strongly rallied into this
election," JP Morgan global market strategist Emmanuel Cau said.
"We've cut a little bit of risk, specifically in the capital
goods and chemicals sectors," he said.
Banks, which are more sensitive than other sectors to
political factors, also turned negative, with the euro zone
banks index falling 0.8 percent having hit its highest
since November 2015.
BNP Paribas and Societe General fell 1
percent and 2.4 percent respectively.
Some market participants had 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 off
pressure on their margins.
In France, mid- and small caps fell 0.2 percent,
less than the drop seen in the more internationally exposed
blue-chip index. SYZ Asset Management analysts expect companies
with domestic exposure to be favoured by Macron's plans.
Among French blue chips they see carmakers Renault
and Peugeot benefitting from greater job market
flexibility and from incentives to buy less polluting cars,
while construction firms Vinci, Eiffage and
Saint Gobain look to be in line for a boost from plans
to modernise infrastructure.
However, shares in Renault, Peugeot, Vinci and Saint Gobain
were all lower, tracking the broader losses, while Eiffage added
Investors remained broadly upbeat about prospects for
European equities, which have started to outperform U.S. and
British peers on the back of one of the strongest earnings
seasons in many years and robust macroeconomic data.
JP Morgan's Cau said the French election result could still
boost investment in European stocks and make the region more
attractive in the medium term.
On Monday, a survey showed that investor sentiment in the
euro zone hit its highest level for almost a decade in May,
improving more than expected thanks to a strong assessment of
the 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 6 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 10 percent.
The picture for earnings however remained strong. According
to Thomson Reuters data about half of European companies have
reported results 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-euro
proposal undervalued the company, faced antitrust risks and does
not address other concerns such as "cultural differences".
(Editing by Jeremy Gaunt)