* FTSEurofirst 300 down 0.9 pct, gains 0.3 pct on quarter
* Renewed euro zone debt worries spark profit-taking bout
* Peripheral indexes drop, post strongest quarterly gains
* For up-to-the-minute market news, click on []
By Blaise Robinson
PARIS, March 31 (Reuters) - European stocks fell back on
Thursday, halting an almost uninterrupted two-week rise as
renewed fears over Portugal's debt crisis prompted investors to
book profits on the last session of the quarter.
Investors were also kept on edge ahead of the results of
stress tests on the Irish banks, which were released at the
closing bell. []
The FTSEurofirst 300 <> index of top European shares
closed 0.9 percent lower at 1.124.88 points, ending the
roller-coaster quarter with a gain of 0.3 percent.
The benchmark index surged 6 percent in the first six weeks
of the year, before escalating violence in Libya and Japan's
devastating earthquake derailed the market rally.
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Asset returns in Q1 2011 graph http://r.reuters.com/wur78r
Key events in Q1 2011 timeline http://r.reuters.com/saj68r
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"From Portugal's debt woes and the health of the Irish banks
to Japan's crisis and the turmoil in the Middle East, the risks
are still simmering, so people are booking profits on some of
the stocks that have performed the most this quarter," said
David Thebault, head of quantitative sales trading at Global
Equities.
Market indexes of the peripheral euro zone countries such as
Spain's IBEX 35 <>, Portugal's PSI 20 <> and Italy's
FTSE MIB <.FTMIB> were hammered on Thursday in big volumes,
losing 1.2-1.5 percent on the day, hurt by data showing
Portugal's budget deficit ballooned above target last year, a
week after Prime Minister Jose Socrates resigned following the
rejection by parliament of a new round of budget cutbacks.
[]
After the closing bell, Ireland said its four remaining
banks require another 24 billion euros ($34.1 billion) to enable
them to withstand potential losses from a worsening of the
economy and the four banks would be reduced to two in a
restructuring.
"It appears to be at the lower end of expectations, but the
question remains, will the market think this is enough and what
will the potential knock-on effects be across Europe?," said
Mark Roberts, banks specialist sales, at Societe Generale.
Despite the drop on Thursday, Spain's IBEX, Italy's FTSE MIB
and Portugal's PSI 20 managed to outperform Europe's broad
indexes for the quarter, gaining respectively 7.3 percent, 7.7
percent and 2.2 percent.
Some of the top European blue chip performers over the past
three months also featured among the biggest losers on Thursday,
with Credit Agricole <CAGR.PA> down 3.6 percent and Societe
Generale <SOGN.PA> down 3.4 percent. The two French banks ended
the quarter up 22 percent and 14 percent, respectively.
(Additional reporting by Simon Jessop in London; Editing by
Greg Mahlich)
