* FTSEurofirst 300 ends 0.3 pct lower
* Fall in U.S. durable goods orders clouds growth picture
* Euro STOXX 50 dips after failing to break resistance level
* For up-to-the-minute market news, click on []
By Blaise Robinson
PARIS, July 28 (Reuters) - European shares ended lower on
Wednesday, bringing to an end a brisk six-day rally as an
unexpected drop in U.S. durable goods orders rekindled economic
concerns and prompted investors to book recent gains.
The FTSEurofirst 300 <> index of top European shares
closed 0.3 percent lower at 1,050.88 points, after rising by as
much as 0.7 percent in early trade.
The Euro STOXX 50 <>, the euro zone's blue-chip
index, ended down 0.1 percent at 2,766.11 points after rising to
2,791.24 points, where it ran into major resistance.
"The Euro STOXX 50 is hitting a ceiling around 2,790 points,
which represents highs hit in June and May, and also the index's
acceleration point on the downside in April," said Vincent
Ganne, technical analyst at IG Markets in Paris.
"Right now, charts are giving a neutral signal, which is
typical in July and August. Corporate results won't change the
picture because they've been priced in already," he said.
Banks ended mixed after gains on Monday and Tuesday that had
been fuelled by strong earnings figures, news of a scale-back of
capital reforms and reassuring stress test results at the end of
last week.
The STOXX bank index <.SX7P>, which featured among the top
losing sectors in the first half of this year, had jumped 4.7
percent on Tuesday alone.
On Wednesday Societe Generale <SOGN.PA> shares rose 1.8
percent, Credit Suisse <CSGN.VX> gained 1.1 percent, while Dexia
<DEXI.BR> fell 1.7 percent and Commerzbank <CBKG.DE> shed 1
percent.
SECTOR ROTATION
Jacques Henry, analyst at Louis Capital Markets, said the
rush back to beaten-down banking stocks this week was triggering
some rotation out of recently outperforming sectors.
Shares in industrial, food and retail companies such as
Siemens <SIEGn.DE>, Nestle <NESN.VX> and Carrefour <CARR.PA>,
which had been performing strongly lately, were among the
biggest losers on Wednesday.
"With the stress tests behind us and the fact that
concessions have been made in Basel III rules, which removes a
sword of Damocles over the banking stocks, investors are
returning to the banks, while booking profits on other sectors
in the process," he said.
ArcelorMittal <ISPA.AS>, the world's largest steelmaker,
fell 2.1 percent after warning that slowing growth in China
could hit profits.
French carmaker PSA Peugeot Citroen <PEUP.PA> fell 4.1
percent following a surge in the stock earlier this month, after
the company's warning of a tougher economic context in the
second half eclipsed strong first-half results.
British gas producer BG Group <BG.L> dropped 2.2 percent
after second-quarter results failed to impress investors.
Safran <SAF.PA> surged 6.5 percent, reversing recent sharp
losses, after the French aerospace company raised its operating
margin forecast for the year after beating expectations with its
first-half earnings.
Around Europe, UK's FTSE 100 index <> ended down 0.9
percent, Germany's DAX index <> down 0.5 percent, and
France's CAC 40 <> up 0.1 percent.
The broad one-week rally in European stocks has pushed
valuation levels to 2-1/2 month highs. Shares in the Europe
STOXX 600 <> currently trade at 13.2 times reported
earnings, a level not seen since mid-May.
That compares with an average price-to-earnings ratio of
15.3 for stocks traded in Wall Street's S&P 500 <.SPX> index.
(Reporting by Blaise Robinson, editing by Will Waterman)
