4 MIN. DE LECTURA
* FTSEurofirst 300 down 0.6 pct
* Italy's FTSE MIB among worst performing stock indexes
* AB Foods drops as Suedzucker warns on sugar outlook
By Tricia Wright
LONDON, April 8 (Reuters) - European shares fell for a second day on Tuesday as investors sold out of some of the year's top performing regional indexes and stocks on fears the upcoming earnings season will prove sobering.
Markets in the euro zone periphery led losses, with Italy's FTSE MIB index down 1.8 percent in brisk trading volumes. The Milan benchmark has strongly outperformed broad European indexes since the start of the year.
Among individual stocks, Associated British Foods fell 4 percent, with traders citing a read-across to the food and textile retailer's sugar business from a profit warning by German mid-cap sugar producer Suedzucker. Its shares sank nearly 20 percent.
The downbeat news, which followed a similar warning in February by British rival Tate & Lyle, fuelled concerns ABF might have to also cut guidance, traders said, despite strength in its clothes retailing arm Primark.
"(ABF) could take a whack from (its) sugar division, which is about a quarter of its business," said Manoj Ladwa, head of trading at TJM Partners.
"It's had a fantastic run, primarily on the back of Primark, but valuations seem pretty high, and it could potentially warn on profits on the back of this news (from Suedzucker)."
According to Thomson Reuters Starmine, ABF trades at a SmartEstimate Price/EPS (forward 12 months) ratio of 25.9, compared to Tate with 12.7 and Suedzucker with 14.4.
ABF's retreat was among the biggest on the pan-European FTSEurofirst 300, down 0.6 percent at 1,328.21 points by 1445 GMT.
The index reported its worst daily percentage drop in a month on Monday as investors took profit on a nine-day rally, fearing the market had got ahead of itself and the upcoming first-quarter results would expose fundamental weaknesses.
A stock market surge in 2013 and in part of this year has left the MSCI Europe dollar-denominated index trading at 13.9 times its expected earnings for the next 12 months, the highest valuation multiple since 2005, Datastream data showed.
Earnings momentum for European shares has remained negative throughout the period, with analysts cutting their 12-month forward estimate for European stocks by 2.5 percent over the past three months, the data showed.
"The positive catalyst would be if earnings progress faster than people are expecting. That doesn't look terribly likely for now," said Frances Hudson, global thematic strategist at Standard Life Investments.
Euro zone banks, which have risen around 20 percent since early December on growing bets on a recovery in the euro zone, were also under pressure.
Among sellers was Markus Huber, senior trader at Peregrine & Black, who expected negative surprises from the sector during the earnings season as a result of several investigations into market rigging and mounting regulatory pressure to increase transparency.
Europe bourses in 2014: link.reuters.com/pap87v
Asset performance in 2014: link.reuters.com/gap87v
Today's European research round-up (Additional reporting by Francesco Canepa, Alistair Smout and Blaise Robinson)