June 20, 2013 / 11:09 AM / 4 years ago

Mining and luxury stocks lead European market sell-off

* FTSEurofirst 300 down 2.2 pct, Euro STOXX 50 falls 2.6 pct

* Euro STOXX 50 falls below 200-day simple moving average level

* Swatch and Richemont hit by fall in Swiss exports data

* New signs of Chinese slowdown hits mining stocks

By Sudip Kar-Gupta

LONDON, June 20 (Reuters) - European shares fell on Thursday, with mining and luxury stocks among the top fallers, as markets around the world took fright after Federal Reserve chairman Ben Bernanke called time on its bond-buying programme and weak Chinese economic data.

The pan-European FTSEurofirst 300 index was down by 2.2 percent at 1,154.96 points in mid-session trading, close to a low of 1,151.10 points reached in late April.

The euro zone's Euro STOXX 50 index also fell 2.6 percent to 2,614.99 points, dropping below its 200-day simple moving average level of 2,633 points to send a negative signal to technical traders.

Miners dominated the loserboard, hit by fresh signs of a slowdown in China - the world's biggest metals consumer.

Swiss luxury goods stocks Swatch and Richemont also fell sharply, which traders attributed to data showing a fall in Swiss exports.

Global share markets have fallen from record highs over the last month as expectations have mounted that the U.S. Federal Reserve will start scaling back an economic stimulus programme known as "quantitative easing" (QE).

The programme has hit returns on bonds and thereby driven many investors over to the better returns on offer from equities, and Bernanke said on Wednesday it was likely to wind down later this year.

Cavendish Asset Management's European equities fund manager Caroline Vincent expected European markets to retreat over the next few months but did not expect any major crash.

"I think we will have a quiet few months but I don't see any reason for a crash. I'm not turning more defensive," she said.

BUYING "PUT" OPTIONS

Darren Courtney-Cook, head of trading at Central Markets Investment Management, expected any pull-back on European equities to be temporary, and for European equities to resume an upwards trajectory towards the end of 2013.

The market decline since late May has dented returns on major European markets, with the FTSEurofirst 300 up 2 percent since the start of 2013. Germany's DAX has risen 5 percent while the Euro STOXX 50 is down by some 1 percent.

Courtney-Cook had bought "put" options, which are used to bet on a market fall, on the DAX index that expires in July with a strike price of 8,000 points. The DAX was down 2.4 percent at 7,997.01 points, with those options implying no recovery in that index over the next month.

Despite his longer-term positive outlook, Courtney-Cook said he would not look to add to equities at present.

"I think it could come off further. I wouldn't be looking to buy the dips here."

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