German shares lag in Europe as Ukraine conflict hits ZEW
* Germany's DAX down 0.2 pct, FTSEurofirst 300 up 0.2 pct * ZEW index, Henkel's guidance show Germany hit by Ukraine crisis * Pandora rallies after results By Francesco Canepa LONDON, Aug 12 (Reuters) - German shares lagged mostly flat European stocks on Tuesday as a key survey provided more evidence the region's largest economy was being hurt by the conflict in Ukraine. Frankfurt's DAX index fell 0.2 percent, the biggest decline among major regional indexes, after the ZEW survey showed German analyst and investor morale fell to its lowest in more than a year in August. The survey reflected the turmoil in Ukraine and concern that sanctions and counter-sanctions between Russia and the West may affect Europe's industrial powerhouse. German companies exposed to Russia range from Adidas, the world's second-largest sportswear firm, to airport operator Fraport and defence firm Rheinmetall. German consumer-goods group Henkel warned on Tuesday that earnings growth would slow in the second half of the year, partly because of the friction between Russia and Ukraine. Henkel shares fell 5.7 percent. A convoy of 280 trucks Russia said was carrying humanitarian aid for Ukraine set off late from near Moscow on Tuesday amid Western warnings against using help as cover for an invasion. Ukraine also reported that Russia has massed 45,000 troops on its border. "The drop in the ZEW index confirms the near-term downside risk for the German and euro zone economies emanating from the Ukraine crisis," said Christian Schulz, an economist at Berenberg. "That does not change the fundamentally positive outlook, however. Germany remains in a strong position to capitalise on any sentiment improvements once the Ukraine crisis fades from the headlines, and many euro zone countries are enjoying the benefits of their reforms." At 1008 GMT, the FTSEurofirst 300 index of top European shares was up 0.2 percent at 1,325.92, after rising 1.3 percent on Monday. The euro zone's blue-chip Euro STOXX 50 index was flat at 3,047.50 points. The indexes are down 6 percent and 8 percent respectively from their July peaks, hit by worries about conflicts from Ukraine to the Middle East, the prospect of a tighter U.S. monetary policy and softer European economic data. "We've already seen the underperformance, so if there is no new (negative) development and the economy starts doing not so badly we may have sen the trough for this correction," said Joost Van Leenders, an investment specialist for allocation and strategy at BNP Paribas Investment Partners. Danish jewellery maker and retailer Pandora helped to support European indexes on Tuesday. The shares surged 8.5 percent after it posted better-than-expected second-quarter results, leading it to raise its 2014 revenue forecast. As Europe's earnings season draws to a close, STOXX Europe 600 companies have posted a 9.7 percent rise in second-quarter profits on average. But revenues have slipped 1.1 percent, reflecting Europe's frustratingly slow economic recovery. 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 Blaise Robinson in Paris; Editing by Larry King)
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