* FTSEurofirst 300 index down 0.2 percent
* Lafarge gains on results, Anglo American joint venture
* J Martins falls as earnings miss forecasts
* For up-to-the minute market news, click on []
By Joanne Frearson
LONDON, Feb 18 (Reuters) - European shares fell on Friday
after China raised banks' required reserves for the second time
this year to contain inflation pressures, a move that hit mining
sector shares, which were among the worst performers.
By 1042 GMT, the pan-European FTSEurofirst 300 <>
index of top shares was down 0.2 percent at 1,184.78 points
after closing at a new 29-month high for the fourth straight day
on Thursday following bullish U.S. regional manufacturing data.
"China tightening monetary policy always has a knee-jerk
reaction in the mining sector, and that's what's bringing us
lower," Joshua Raymond, market strategist at City Index, said.
"With the (China) inflation figure earlier in the week,
which was slightly lower than the market had expected, it's
obviously going to escalate some fears that potentially metals
demand could slow in the near to medium term in reaction to the
policy."
China's central bank said on Friday that it would once again
raise lenders' required reserves by 50 basis points.
[]
Miners tracked copper lower <MCU3=LX> on worries about
further monetary tightening in China, with the STOXX Europe 600
Basic Resources <.SXPP> down 0.7 percent.
Anglo American slipped 2.6 percent as traders said investors
were taking profits after the world's fourth-largest diversified
miner, posted better-than-expected results, although Liberum
Capital said "a small negative is a slightly stingy dividend."
[]
The miner also said it is to move its Tarmac UK aggregates
and cement business into a joint venture with Lafarge <LAFP.PA>
to create a UK construction materials combine. []
France's Lafarge rose 4.6 percent on the joint-venture move
and after the cement maker predicted stronger demand in its
markets this year thanks to fast economic growth in emerging
countries. []
Oil stocks reversed earlier rises after Brent crude prices
<LCOc1> pared gains on the China move, with the STOXX Europe 600
Oil & Gas <.SXEP> down 0.1 percent.
Investors were also cautious following further political
unrest in the oil-producing Middle East as people across the
region have protested against governments. []
JERONIMO MARTIN FALLS
Portuguese retailer Jeronimo Martins <JMT.LS> fell 2.9
percent after it missed 2010 net profit forecasts and gave a
cautious outlook. []
"Management's tone is perhaps a little bit more cautious
than people were expecting," said Liberum Capital analyst Simon
Dunn, noting the group highlighted a tough macro-economic
backdrop for Portugal and the potential impact on volumes from
higher raw material prices.
SES <SESFd.PA>, the world's second-largest satellite
operator, lost 3.2 percent after it forecast slower revenue
growth this year. []
In the peripheral markets, Portugal's PSI 20 index <>
slipped 1.3 percent, Italy's benchmark <.FTMIB> lost 1.3 percent
and Spain's IBEX 35 <> was down 1.3 percent.
A euro zone source said on Thursday said European Union
member states were increasingly concerned about Portugal's
ability to fund itself in financial markets and believed Lisbon
would need to seek a bailout by April. []
Technical indicators showed the market was nearing
overbought conditions. The 14-day relative strength index (RSI)
on the Euro STOXX 50 <>, the euro zone's blue-chip
index was at 66 having risen to 68.8 on Thursday.
Seventy and above is considered overbought territory and
could signal a pull back for equities.
Across Europe, the FTSE 100 <> index was down 0.6
percent, Germany's DAX <> was 0.3 percent lower and
France's CAC 40 <> was down 0.3 percent.
(Additional reporting by Brian Gorman)
(Reporting by Joanne Frearson. Editing by Jane Merriman)
