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By Mark Meadows

Written by: Staff

LONDON, Mar 16 (Reuters) European stocks eased from a near five-year high on Thursday after German insurer Allianz failed to inspire investors despite a record 2005 net profit, while fresh interest rate fears also weighed.

Bourses have been buoyed by a recent takeover frenzy but a slowdown in new developments gave investors the opportunity to reassess positions.

The FTSEurofirst 300 index of leading European shares was down 0.3 per cent at 1,364.74 by 1150 GMT (1720 IST), having climbed for the past five sessions to levels last seen in July 2001.

Allianz's annual earnings almost doubled to come in just ahead of analyst estimates but concerns about its Dresdner banking business contributed to the stock's 1.7 per cent decline.

The shares have risen around 40 per cent since the start of 2005.

''Allianz released an essentially in-line set of results. In the bank, operating profits were lower than expected, due to expenses. Overall, there were no real surprises in the results,'' said Roddy Wallace, analyst at Barclays Stockbrokers.

Around Europe, Germany's DAX slipped 0.3 per cent largely down to Allianz, while France's CAC 40 lost 0.3 per cent and Britain's FTSE 100 was 0.18 per cent weaker.

UK drugmaker GlaxoSmithKline fell 1.4 per cent after a downgrade to ''underweight'' from JP Morgan while Internet gambling firm PartyGaming slipped as concerns grow over moves in the United States to stamp out the billion industry.

General losses extended after MNSI reported sources saying the European Central Bank is aiming to raise interest rates to a neutral level as the economy strengthens and inflation risks persist. The timing was open, they said.

European shares were hampered in early March by fears the Federal Reserve, European Central Bank and Bank of Japan may all be in hawkish moneatary policy mode at the same time.

AUTOS DRIVE UP There was some merger and acquisition news with Spanish telecoms giant Telefonica saying it would propose merging with its 92.46-per cent-owned wireless unit Moviles. Moviles shares were up 1 per cent on the day.

Mobile network operator Vodafone gained as sources said two U.S. private equity firms were planning a billion rival bid for its Japanese arm.

Carmakers also advanced after new car registrations in Europe rose 2.1 per cent in February, with higher demand in Italy and France offsetting weaker markets in Germany, Britain and Spain.

Italy's Fiat rose almost 3 per cent. BMW got an extra boost, up 2.3 per cent, after Merrill Lynch raised the stock to ''buy'', dealers said.

Shares in Casino Guichard Perrachon shot up after the French supermarket group refocused its activities on France and fast-growing overseas markets such as Latin America as it announced asset sales in a drive to slash debt.

ThyssenKrupp gained 3 per cent, underpinned by unexpectedly high profits reported by UK rival Corus.

''The numbers from Corus support the newfound optimistic view of the steel sector and that is helping ThyssenKrupp,'' says HVB analyst Christian Obst.

Gaz de France shares also added 3 per cent after it announced a bigger-than-expected dividend increase.


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