* FTSeurofirst 300 <> flat
* Banks weak as China monetary tightening fears resurface
* Defensive drugmakers, food retailers gain
* Goldman Sachs and Google results eyed
By Harpreet Bhal
LONDON, Jan 21 (Reuters) - European shares were flat in
early trade on Thursday, with weakness in banks and miners just
offsetting gains in defensive drugmakers, as investors stayed
cautious ahead of further corporate earnings from the U.S.
The pan-European FTSEurofirst 300 <> index was up 0.01
percent at 1,052.62 points. In the previous session the index
fell from a 15-month high, and posted its biggest one-day
percentage drop in one and a half months.
Banks were among the biggest sector drags, as fears over
monetary tightening in China resurfaced, while worries over
Greece's fiscal problems put pressure on the country's banks.
Barclays <BARC.L>, BBVA <BBVA.MC>, Commerzbank <CBKG.DE> and
Deutsche Bank <DBKGn.DE> were off 0.1 to 1.6 percent.
In Greece, Alpha Bank <ACBr.AT>, Bank of Greece <BOGr.AT>
and Bank of Piraeus <BOPr.AT> shed 0.8 to 5.1 percent.
China's annual gross domestic product growth accelerated in
the fourth quarter of last year to 10.7 percent from 8.9 percent
in the third quarter, setting the stage for further monetary
tightening and putting it on course to overtake Japan as the
world's second-largest economy. []
Later in the session investors will await quarterly earnings
from Goldman Sachs <GS.N>, while Google <GOOG.O> will release
earnings after European markets close.
"The market is going to be very cautious. We need to see
more results from the U.S. to see how we're really doing," said
David Buik, partner at BGC Partners.
Mining companies fell, pressured by weaker metals prices.
Anglo American <AAL.L>, BHP Billiton <BLT.L>, Kazakhmys <KAZ.L>
and Xstrata <XTA.L> shed 0.4 to 1.9 percent.
Across Europe, Britain's FTSE 100 <> rose 0.3 percent,
Germany's DAX <> was up 0.3 percent and France's CAC 40
<> advanced 0.5 percent.
PHARMACEUTICALS GAIN
Among the gaining sectors, pharmaceutical firms were
stronger. AstraZeneca <AZN.L> rose 1.7 percent as Morgan Stanley
upgraded its rating to "overweight" from "equalweight".
GlaxoSmithKline <GSK.L> and Roche <ROG.VX> added 1.4 and 0.7
percent, as the sector benefitted from a Republican victory in
the U.S. state of Massachusetts on Tuesday, which casts
President Barack Obama's healthcare reform plans in doubt.
[]
Defensive food producers, which benefit from their safe-bet
appeal, were also higher. Associated British Foods <ABF.L>,
Nestle <NESN.VX> and Unilever <ULVR.L> were up 0.5 to 1.2
percent.
Among individual movers, Nokia <NOK1V.HE> gained 0.9 percent
after the San Francisco Chronicle said the Finnish company
followed Google's <GOOG.O> move by offering free navigation on
its cellphones. This is likely to hurt key players in the
satellite navigation market like Netherlands-based group TomTom
<TOM2.AS>, whose shares dropped more than 10 percent on the
news.
Among retailers, Britain's WM Morrisson <MRW.L> fell 1.5 as
cautious comments about 2010 and the lack of news on a new chief
executive to succeed the Marks & Spencer <MKS.L> bound Marc
Bolland offset the biggest rise in Christmas sales among
Britain's top four grocers. []
Within the sector, Ahold <AHLN.AS> rose 0.2 percent after
the Dutch retailer posted better-than-expected fourth-quarter
sales with promotions helping to boost sales volumes and offset
weak consumer spending and falling food prices. []
On the macroeconomic front, a rise in output helped German
manufacturing activity expand in January at its fastest rate
since May 2008, supporting growth in the private sector of
Europe's largest economy. []
(Editing by Jon Loades-Carter)
