* FTSEurofirst 300 off 0.2 pct, retreats from 6-1/2 yr high
* Colruyt down; warns of tough year ahead after profit fall
* Syngenta surges on report of Monsanto bid interest
By Tricia Wright
LONDON, June 24 (Reuters) - European shares retreated after a firmer start on Tuesday, with Colruyt among the biggest fallers on downbeat earnings, while the broader market was unable to gain traction from new signs of corporate takeover activity.
Colruyt fell 3.1 percent to a 2-1/2 month low, in brisk trade, as the Belgian discount retailer warned of a difficult year ahead after posting a slight drop in profits.
“They have a good strategy, but the market is really against them. Competitors are also focusing on volumes, with very low food inflation,” Bank Degroof analyst Hans D‘Haese said.
The Belgian supermarket landscape has been fiercely competitive over the past few quarters, also due to Dutch rival Ahold’s Albert Heijn entering the market and German hard discounters Aldi and Lidl gaining ground.
Trading volume in Colruyt was robust, at three quarters of its 90-day daily average.
The broader FTSEurofirst 300, meanwhile, had traded just a third of its average volume, with the index off 0.2 percent at 1,385.85 points by 1055 GMT. The euro zone’s blue-chip Euro STOXX 50 was flat at 3,283.39 points.
Swiss agrochemicals group Syngenta bucked the slightly weaker trend, rising 5.3 percent following a Bloomberg report that peer Monsanto had considered buying it.
A spokesman for Syngenta was not immediately available for comment.
While the market was unable to hold onto gains seen at the start of the session investors were unfazed, describing the weakness as a temporary setback.
“We have it down as a bit of a technical sell-off this morning just as we approached key levels in major indexes,” Matt Basi, head of sales trading at CMC Markets, said.
Barclays Capital analyst Lynnden Branigan reckoned that on the Euro STOXX 50, the 50-day moving average, at 3,218, would provide a good buying opportunity.
“(We are just having) a little bit of a breather. Overall the trend is still higher,” he said, seeing scope for the Euro STOXX 50 to move to the recent high, at 3,325, in the near term.
Investors reckoned on a pick-up in mergers and acquisition (M&A) activity ultimately winning through, keeping the region’s stock markets buoyant.
“Our outlook for equity markets for the remainder of the year is positive. M&A has made a welcome return in recent months,” Mark Burgess, chief investment officer at Threadneedle Investments, said.
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 Sudip Kar-Gupta and Philip Blenkinsop. Editing by Jane Merriman)