* FTSEurofirst 300 rises 0.3 pct, Euro STOXX 50 up 0.2 pct
* Benchmark posts best monthly performance since December
* Recent low volumes, 'overbought' DAX raise red flags
* Euro's march towards $1.50 rekindles worries for equities
* For up-to-the-minute market news, click on []
By Blaise Robinson
PARIS, April 29 (Reuters) - European stocks inched higher on
Friday, rallying for a seven straight session and posting their
best monthly performance since December, but volumes were light
due to a UK public holiday.
The FTSEurofirst 300 <> index of top European shares
closed 0.3 percent higher at 1,156.81 points, gaining 2.7
percent for April, while the euro zone's blue chip Euro STOXX 50
<> index ended up 0.2 percent at 3,011.25 points.
Germany's DAX index <> added 0.5 percent and France's
CAC 40 <> gained 0.1 percent.
The volume on the two benchmark indexes represented
respectively 80 percent and 68 percent of their 90-day average.
Despite the recent rally sparked in part by strong corporate
results, volumes have been too low to confirm the return of a
solid upward trend, technical analysts said, while charts show
Germany's DAX <> ripe for a pull-back.
The benchmark index, home of bellwethers such as Siemens
<SIEGn.DE> and SAP <SAPG.DE>, has surged 16 percent since
mid-March and was flirting with "overbought" territory on
Friday.
Its relative strength index (RSI) at 69.7 -- with 70 and
above considered "overbought" -- coupled with a slow stochastic,
an indicator of short-term trends, showed the index was poised
for a retreat.
The spectre of a strong euro hitting the region's exporters
was also creeping back into investors' minds on Friday, with
dollar-sensitive EADS <EAD.PA> and STMicroelectronics <STM.PA>
falling 1.1 and 0.9 percent respectively.
"With an euro at $1.50, the euro zone will slip back into
recession in the third quarter of this year. Investors will then
realise the damage caused by a 'killer' euro," said Marc Touati,
head of economic research at Paris-based Global Equities.
Despite lingering concerns over the euro zone debt crisis
that have hammered the region's sovereign debt market in April,
the single currency hit a 16-month high of $1.4881 this week.
While the euro flirts with levels not seen since late 2009,
and might remain high for a while, a number of fund managers and
strategists see the region's equity market hitting the pain
threshold soon.
Philippe Nahum, head of Paris-based B*Capital, said the
euro's rally has caught a number of companies off guard.
"But the stocks are not affected all in the same way.
European firms producing in the euro zone are penalised because
they lose competitiveness ... But others which produce outside
the euro zone and sell in the zone will be the winners."
Shares in German carmaker Daimler <DAIGn.DE> lost 1.7
percent as its first-quarter results failed to impress
investors.
(Editing by David Holmes)
