* Weak German Ifo reading weighs on DAX
* LVMH slumps after below-forecast Q2 results
* DAX down 0.1 pct, CAC down 0.5 pct
* FTSEurofirst 300 index flat
By Sudip Kar-Gupta
LONDON, July 25 (Reuters) - Weak German economic data and a slump in the shares of luxury goods group LVMH weighed on European stock markets on Friday.
Germany's benchmark DAX equity index, which hit a record high of 10,050.98 points in late June, was down by 0.3 percent at 9,760.65 points going into the middle of the trading day.
The DAX came under pressure after the Munich-based Ifo think-tank's business climate index showed that German business sentiment fell to its lowest level in nine months in July.
"The IFO number looked negative. I think the European stock markets will drift slightly lower," said Darren Courtney-Cook, head of trading at Central Markets Investment Management.
Courtney-Cook said he would be "short" on the DAX futures - namely betting on future falls - between the 9,750-9,800 points range, due to his expectations that European stock markets would edge lower over the coming month.
France's benchmark CAC equity index also fell 0.7 percent, as a 6.8 percent slide at LVMH hit the Paris market.
LVMH was also the worst performing stock, in percentage terms, on the pan-European FTSEurofirst 300 index, which slipped 0.2 percent to 1,379.85 points.
LVMH reported second quarter sales and profits that missed market forecasts late on Thursday, after European stock markets had closed.
The world's biggest luxury goods group said it had seen a drop in demand from Chinese buyers, and LVMH's woes also hit rival luxury goods companies, with Richemont falling 2.1 percent while Kering dropped 3.1 percent.
Loic Morvan, an analyst at investment bank Bryan Garnier, cut his rating on LVMH to "neutral" from "buy", adding that LVMH's business slowed down significantly in the second quarter.
In Europe so far this quarter, 40 percent of companies have missed earnings expectations, according to Thomson Reuters StarMine data, underperforming the United States, where the number is 28 percent.
"Overall sentiment remains neutral, with investors continuing to prefer U.S. stocks to European ones due to the U.S. earnings season having delivered solid and mostly better than expected results so far," said Markus Huber, senior sales trader at Peregrine & Black.
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 Alistair Smout, editing by Angus MacSwan)