(Repeating to add .EU named item code. Text unchanged.)
* FTSEurofirst 300 down 0.2 pct, retreating from 15-mth high
* Pharma stocks drop after France cancels flu shot orders
* Cadbury falls as Nestle says won't bid, Kraft raises offer
* For up-to-the-minute market news, click on []
By Blaise Robinson
PARIS, Jan 5 (Reuters) - European shares dipped in early
trade on Tuesday, retreating from a 15-month high as investors
booked a small portion of recent lofty gains, with pharma stocks
dropping on mounting worries over sales of H1N1 flu vaccines.
At 0940 GMT, the FTSEurofirst 300 index of top European
shares was down 0.2 percent at 1,058.43 points. The index surged
1.4 percent on Monday for its first session of the year, as
upbeat U.S. economic data helped the market extend its 25.7
percent rally of 2009.
"It's a little pause, but overall this is the start of a
brand new year, people really want to believe in a good 2010 for
stocks, and this sentiment is fuelled by strong macro data and
the return of the M&A fever," said David Thebault, head of
quantitative sales trading, at Global Equities, in Paris.
"We're seeing funds reallocating their assets in favour of
equities, and that is something that will support the rally."
Pharma shares featured among the biggest losers, hit by news
that France cancelled 50 million doses of H1N1 flu shots it had
ordered to combat the virus.
France had ordered the shots from Sanofi-Pasteur, a unit of
Sanofi-Aventis <SASY.PA>, GlaxoSmithKline <GSK.L>, Novartis
<NOVN.VX> and Baxter International <BAX.N>.
But a Sanofi Pasteur spokesman said the impact on sales
would be minimal.
"We don't expect this change in the French order to impact
sales as the freed number of doses will be reallocated to other
countries which are looking for H1N1 vaccines," he said.
Sanofi-Aventis shares dropped 1.5 percent, while
GlaxoSmithKline stock lost 1.6 percent.
Novartis was down 1.9 percent, also hit by a share offer to
buy out minority Alcon <ACL.N> shareholders that would lead to
dilution.
But the broad market's fall was cushioned by rising banking
shares, with Natixis <CNAT.PA> up 2.8 percent, Deutsche Bank
<DBKGn.DE> up 1.1 percent and Credit Suisse <CSGN.VX> up 0.9
percent.
The sector <.SX7P>, one of the best performers among DJ
STOXX 600 <> sectors last year, is expected to
underperform in 2010, Deutsche Bank said, noting that the
normalisation of credit costs has largely been priced in.
"With funding hard to come by and new regulation acting as a
constraint, we expect growth to be scarce, limited mainly to
emerging market plays and asset gathering," Deutsche Bank said
in a research note.
CADBURY SAGS DESPITE KRAFT'S SWEETENED BID
Cadbury Plc <CBRY.L> fell 1.7 percent after Nestle <NESN.VX>
said it has no intention to bid for Cadbury, ending speculation
over one potential suitor for the UK chocolatier, while Kraft
Foods <KFT.L> raised the cash portion of its hostile 10 billion
pound ($16.11 billion) bid for Cadbury, funded by a deal to sell
its North American pizza unit to Nestle for $3.7 billion.
Nestle was down 0.5 percent.
Around Europe, UK's FTSE 100 index <> was down 0.1
percent, Germany's DAX index <> flat, and France's CAC 40
<> down 0.1 percent.
UK retailer Next <NXT.L> dropped 2.6 percent after the
fashion chain warned 2010-11 profits could be flat, even as it
upgrades 2009-10 forecasts after a solid Christmas.
Telecom Italia <TLIT.MI> rose 2.3 percent after a newspaper
report that Spain's Telefonica <TEF.MC> could increase its stake
in Telco which controls 23.6 percent of the Italian telecoms
group. Telefonica was down 0.1 percent.
Investors were bracing for key U.S. macro data on Tuesday,
including monthly factory orders, pending home sales, and car
sales, ahead of all-important monthly jobs data due later in the
week.
($1=.6208 Pound)
(Additional reporting by Caroline Jacobs; Editing by Sharon
Lindores)
