* FTSEurofirst down 1.3 percent
* Spain's IBEX and banks among top fallers
* Regulatory concerns drive Admiral lower
LONDON, Sept 28 (Reuters) - European shares ended the
quarter with a whimper as fund managers banked gains on stocks
that drove a strong rally over the last three-months and
switched their focus to concerns over corporate earnings and the
macro economy.
The FTSEurofirst 300 provisionally closed down
14.04 points, or 1.3 percent, at 1,089.22, though with volumes
light. The index has traded in a tight 40-point range since
early September.
The Euro STOXX 50, which has enjoyed its best
quarter in three years, shed 2.1 percent on the last session of
the three month period.
The index of euro zone blue chip companies emitted a bearish
signal after it fell through support at the 23.6 percent
Fibonacci retracement of the late July to mid-September rally.
"The rally has been driven by central banks' stimulus. For
markets to push on we need much stronger performance from the
corporates and the macro economy, and there the news is getting
worse rather than better," said Andrew Milligan, head of global
strategy at Standard Life Investments, which has 157.6 billion
pounds of assets under management.
Spain's IBEX fell 1.7 percent after adding 17
percent since early July. Banks fell 1.7 percent on
Friday, having added around 15 percent in the quarter after
European Central Bank president Mario Draghi pledged to do
whatever it takes to save the euro, and effectively slashed the
risks of the financial system failing.
Despite central bank action the broader economy remains
stressed.
A barometer of Midwest business activity in the U.S.
contracted in September for the first time in three years. That
followed drastically revised down second-quarter GDP figures in
the world's largest economy in the previous session.
The French economy will be under pressure after France
President Francois Hollande's Socialist government unveiled
sharp tax hikes on business and the rich in its 2013 budget.
And with austerity protests continuing in the Greece's
capital Athens and Madrid, Spain was in the spotlight after
stress tests showed its banks may need 59.3 billion euros in
extra capital to ride out a serious economic downturn.
Following Spain's crisis budget on Thursday the Wall Street
Journal reported that Moody's could downgrade its rating on the
country raising expectations the country will apply for a
sovereign bailout.
RANGEBOUND
European equities will be range-bound in the coming months
after hefty gains in the previous quarter, a Reuters poll of
investors and analysts showed.
"Markets are wobbling but they are not capitulating so there
is some hope and support to be found, but unless something
substantial happens maybe on the streets in terms of civil
unrest or political will, we are going to be rangebound for a
little while," Oliver Wallin, investment director at Octopus,
said.
Wallin said Octopus's fund positioning is currently
"neutral". Having built up a mild "overweight" exposure in
Europe over the last month Octopus has been banking gains over
the last few days.
"We have had central bankers setting the stage and now
there's uncertainty over the next steps," he said.
Highlighting investor caution precious metal miners Randgold
and Fresnillo were strong performers gaining
1.9 percent and 4.2 percent respectively on Friday, having added
around 30 percent in the quarter as investors bought them as a
proxy for safe haven gold.
Among individual fallers, Admiral dropped 3 percent
in heavy volume after UK regulators launch an investigation of
the motor insurance market, saying that competition is not
working properly and pushing up costs for consumers.
"Admiral is most exposed. RSA and Aviva are
large commercial insurers and motor insurance is a small part of
their business. That's not going to kill them, but for Admiral
it's their only business," Investec analyst Kevin Ryan said.
RSA shares shed 1.3 percent, while Aviva fell 1.1 percent.
