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European shares weighed down by miners; Munich RE shrugs off warning

By Danilo Masoni

By Danilo Masoni

MILAN (Reuters) - European stock markets inched lower on Thursday, weighed down by weaker miners, while shares in German reinsurer Munich Re <MUVGn.DE> shrugged off a profit warning.

The pan-European STOXX 600 <.STOXX> index was down 0.2 percent, with the basic resources sector taking most points off as investors digested a decline in industrial metals and disappointing data from top consumer China.

Shares in London-listed heavyweight miners Rio Tinto <RIO.L>, Glencore <GLEN.L> and BHP Billiton <BLT.L> were all down between 1.7 and 1.3 percent.

Among other regional benchmarks, Britain's FTSE <.FTSE> fell 0.1 percent ahead of the results of Bank of England policy meeting later in the day, while Germany's DAX <.GDAXI> was down 0.3 percent.

Munich Re <MUVGn.DE> was up 0.2 percent. The German firm said it could miss its profit target this year due to losses from hurricanes Harvey and Irma.

Analysts at Baader Helvea cut their earning forecasts for the company but kept their 'hold' rating, citing attractive valuations and expectations that policy prices could stabilise.

"Munich Re is well positioned to weather the storm and seize potential opportunities given the very strong balance sheet," they said in a note.

Switzerland's biggest life insurer Swiss Life <SLHN.S> fell 1.7 percent on worries over a possible fine in the United States after the company said it was contacted by the Department of Justice about whether it helped U.S. clients avoid tax.

Hermes <HRMS.PA> fell 3.1 percent after the French luxury goods maker struck a note of caution over the impact of the euro's strength, which overshadowed a record first half operating margin.

CEO Axel Dumas said there could be a negative impact from a stronger euro on 2018 profits.

Among gainers was Next <NXT.L>, up 8 percent after the British clothing retailer nudged its full-year sales and profit guidance higher.

Rivals Debenhams <DEB.L> and Marks & Spencer <MKS.L> were up 2.4 percent and 3.5 percent respectively.

UK sub-prime lender Provident Financial <PFG.L>, which in August issued a profit warning that wiped out two thirds of its market value, was the top STOXX faller, down 4.6 percent.

Analysts at RBC downgraded the stock to underperform, saying its earnings were rapidly declining and it was questionable whether its issues were under control.

"Despite our now negative stance on the company, we believe Provident’s funding remains sufficient in the near term," they added.

(Reporting by Danilo Masoni; editing by John Stonestreet)