* FTSEurofirst 300 falls 0.7 pct
* Libya unrest prompts concerns of spread to region
* Carlsberg drops on surprise fall in operating profit
* For up-to-the minute market news, click on []
By Harpreet Bhal
LONDON, Feb 21 (Reuters) - European shares slipped on Monday
on mounting concern over political stability in oil producers
after escalating unrest in Libya over the weekend, prompting
investors to cut exposure to risk.
By 1006 GMT, the pan-European FTSEurofirst 300 <>
index of top shares was down 0.7 percent at 1,178.95 points,
after gaining 1.1 percent in the previous week when the index
hit 29-month highs.
Anti-government protesters rallied in Tripoli's streets and
army units defected to the opposition in one of the bloodiest
revolts to convulse the Arab world, prompting concerns over the
supply of oil and the impact on European business interests in
the region. []
"Libya has more significant oil reserves than Egypt and
there is uncertainty about supplies. Markets don't like
uncertainty," said Bernard McAlinden investment strategist at
NCB Stockbrokers.
Italian energy firm ENI <ENI.MI>, which has extensive
operations in Libya, shed 3.7 percent on fears of the
repercussions of social unrest in the North African state.
A spokesman for ENI, however, said output from Libya was
going ahead normally in the last 24 hours. []
"It's clear that the stock reflects what is happening in
Libya. Italy has a lot of links with Libya and so there's an
impact," a trader said.
Austrian energy group OMV <OMVV.VI> also fell on concerns
about its operations in Libya. The stock shed 2.7 percent.
The VDAX-NEW volatility index <.V1XI>, one of Europe's main
barometers of investor anxiety, rose 7.6 percent and hit its
highest level in 2-1/2 weeks.
The higher the volatility index, based on sell- and
buy-options on Frankfurt's top-30 stocks <0#.GDAXI>, the lower
investors' appetite for risky assets such as stocks.
Company results also provided direction for individual
stocks, with Carlsberg <CARLb.CO> down 2.1 percent after the
Danish brewer posted a surprise fall in fourth-quarter operating
profit and said the Russian market in 2010 had been hit hard by
excise duties.[]
SWEET SPOT
Weakness in the market, however, was partly offset by
confidence over the pace of economic recovery after data showed
activity in the euro zone's private sector grew faster than
expected this month, while a separate report highlighted an
improvement in German business sentiment for the ninth month in
a row []
Gains since the beginning of the year have helped the
FTSEurofirst 300 index add 5.6 percent since January, partly on
optimism over a recovery in the economy and expectations that
monetary policy in the U.S will stay accommodative for now.
"There is money at the margin coming out of bonds and going
into equities. It's the sweet spot where you have got increasing
confidence in the economic recovery and at the same time the
(U.S) Fed is sticking to its super loose policy until we get
core inflation turning higher," McAlinden said.
Individual gainers included Merck KGaA <MRCG.DE>, which rose
4.2 percent after the German drugmaker predicted a rise in
operating profit in 2011 []
Greece's Alpha Bank <ACBr.AT> jumped 12.5 percent as trade
resumed after it rejected a takeover bid by peer National Bank
of Greece (NBG) <NBGr.AT>. NBG rose 2.5 percent.
Across the Atlantic, Wall Street will be closed for the
Presidents Day holiday.
(Additional reporting by Giancarlo Navach in Milan; Editing by
Louise Heavens)
