European shares halt sell-off; Swatch jumps

By Blaise Robinson PARIS (Reuters) - European stocks inched up in early trade on Wednesday, halting a two-week selloff, but underlying worries about global growth and emerging market currencies kept investors on edge. Swiss watch maker Swatch featured among the top gainers, up 4.7 percent after posting a strong rise in 2013 profits and saying it expects healthy growth this year. The overall earnings picture remained mixed, with Syngenta falling 2.2 percent after the world's largest maker of crop chemicals reported an 11 percent fall in profit for last year. "Earnings growth in Europe has been negative over the last two years. If earnings do not improve during the next months, 2014 will prove to be a difficult year for the stock market," said Koen De Leus, senior economist at KBC, in Brussels. At 0836 GMT, the FTSEurofirst 300 index of top European shares was up 0.3 percent at 1,274.34 points. The benchmark index is still down 5.9 percent since hitting a peak on Jan 21, its steepest pull-back in seven months. The euro zone's blue-chip Euro STOXX 50 index was up 0.1 percent at 2,964.58 points. Technical charts showed both indexes reaching 'oversold' levels after the two-week slump, with their relative strength indexes (RSIs) approaching 30, which could limit losses in the short term, Aurel BGC chartist Gerard Sagnier said. "Indexes might start to stabilise after such a drop, but the risk is still clearly that they fall back to the lows seen in December," he said. "However, there hasn't been any major signal of a longer-term trend reversal, so the strategy is still to take advantage of the pull-back to buy." The FTSEurofirst 300 would need to fall by about a further 2 percent to reach its December low, and the Euro STOXX 50 by about 1.5 percent. Investors have been rattled by recent sharp swings in emerging market assets, hammered by a reduction of stimulus from the U.S. Federal Reserve as well as tepid manufacturing data from China and the United States. Market players will be reluctant to take new positions ahead of the European Central Bank's monetary policy decision and press conference on Thursday, and Friday's monthly U.S. job data. (Editing by John Stonestreet)