* FTSEuro down 0.7 pct, Euro STOXX down 0.9 pct.
* Italy's FTSE MIB lags on political uncertainty
By Francesco Canepa
LONDON, Feb 13 (Reuters) - European stocks snapped aweek-long winning streak on Thursday, weighed down by a batch ofdisappointing updates from blue-chip companies including Swissfood group Nestle and French bank BNP Paribas (Milan: BNP.MI - news) .
Shares in Nestle fell 2.1 percent after it said it mayundershoot its long-term growth targets again this year due toweaker demand from emerging markets and price pressures inEurope.
French spirits group Pernod Ricard (Frankfurt: PER.F - news) also warnedabout weak demand in China on Thursday as it cut its annualprofit growth goal. After a sharp drop in early trade, shares inthe group rebounded, with analysts at Liberum saying long-terminvestors could find an attractive entry point at the currentprice.
An MSCI basket of stocks with the highest proportion ofsales from emerging countries has fallen by more than twopercent this year, underperforming the broader market, as signsof a slowdown in China and capital flight from other emergingcountries saw traders ditch assets linked to those regions.
European equites with emerging exposure:
"Our view is that there will be some further disappointmentfrom companies exposed to emerging markets in the fourth quarter(2013). Difficult to assess, however, what is now included inshare prices as this thematic is very well known" Yann Belvisi,a strategist at CM-CIC Securities in Paris said.
"Consensus is becoming very bearish on these stocks but wedon't expect (emerging market) economies to bottom too low, soopportunities should materialize later in the year."
The pan-European FTSEurofirst 300 index was down0.7 percent at 1,317.19 points at 1132 GMT, falling for thefirst time in seven sessions. The Euro STOXX 50 index was down 0.9 percent at 3,068.07.
Britain's Rolls Royce (LSE: RR.L - news) , the world's second-largestaircraft engine maker, was the top faller on the FTSEurofirst300, down 13.3 percent, after it forecast declining defenceaerospace and marine revenues in 2014.
Also weighing on the index were banks after weak updatesfrom BNP Paribas, Belgium's KBC and Britain's LLoydsBanking Group, down between 1.7 percent and 4.4percent.
European commercial banks were seen missing consensusexpectations by 18 percent this quarter, according to StarMine'sSmartEstimates, which are based on the forecasts of the analystswith the best track record.
The STOXX Europe 600 banking index has risen nearly30 percent since late June 2013 as investors piled into stocksexposed to the European domestic recovery.
Bucking the sector trend was Germany's Commerzbank (TLO: CB-U.TI - news), which rose 2.8 percent after posting a small profitin the fourth quarter of 2013 and showing its restructuring hadgained traction.
Italy's FTSE MIB was the worst performer amongmajor European indexes as it fell 1.2 percent on uncertaintyover the stability of its government.
Prime Minister Enrico Letta's position has come underincreasing pressure following repeated criticisms by his partysecretary Matteo Renzi of the slow pace of economic reforms.
The leadership committee of Letta's Democratic Party meetsat 1400 GMT to decide whether Letta has the backing of his partyto continue.
A solid auction of Italian debt earlier on Thursday,however, suggested investors were keeping their faith in Italydespite the fresh wave of political uncertainty as the prospectof fresh elections remained remote.
"It's a tail risk so far and it would only become a realrisk if we had elections, which seems unlikely," said WouterSturkenboom, investment strategist at Russel Investments, whichmanages around $256 billion dollars worth of assets.
"If Renzi becomes prime minister it could actually be apositive because he might be a little bit more forceful on thereform agenda."
Europe bourses in 2014:
Asset performance in 2014:
Today's European research round-up
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