European equities edged lower to steady just below a five-and-a-half-year high yesterday, hit by a string of losses in the retail sector after corporate reports but receiving support from miners.

The retail index fell 0.7 per cent, hit by company updates from the likes of Carrefour, the world’s second biggest retailer, which dropped 3.7 per cent after disappointing sales figures.

Dutch retailer Ahold, Dixons and Primark owner AB Foods all dropped after earnings updates.

The retail sector gained 20 per cent in 2013, but many high street names have struggled during the important festive trading period.

“Over the last year, retail stocks really have rallied, and now the sector does look quite expensive. That leaves expectations quite high, and we’ve highlighted the potential for retail to surprise to the downside this earnings season,” Dennis Jose, European equity strategist at Barclays, said.

At the close, the pan-European FTSEurofirst 300 index was down 0.15 per cent at 1,337.75 points, having climbed one per cent to a five-and-a-half-year high on Wednesday on US data and strong results from companies such as Bank of America .

Wednesday’s gain took the index solidly out of the range that it had traded in since the start of the year, and it is still up 1.7 per cent for 2014.

“The risk of a consolidation is certainly there, as we’ve had a pretty good run. If we do get a correction... we’d be looking at it as a buying opportunity,” Barclays’ Jose said.

The STOXX Europe 600 basic resources index rose 2.5 per cent to the top of the sectoral gainers’ list. A sharp rise in output helped Rio Tinto rise 2.5 per cent and research notes helped BHP Billiton and Polymetal advance 3.8 per cent and 5.7 per cent.

A Citigroup note said it changed its 12-month sector stance to “bullish” from “neutral” to reflect better fundamentals, naming BHP and Rio among its key picks. Polymetal was helped by an upgrade from UBS to “buy” from “neutral”.

Charts also suggested that recent price action had been positive for the market and that the eurozone’s blue-chip Euro STOXX 50 index was poised to rise again in the near term. The index was down 0.6 per cent at 3,150.20 points after hitting a new five-year high earlier in the session.

“The index is showing a bullish consolidation pattern, suggesting an upside potential of 90 points. The trend is definitely up and I am looking for a rally to around 3,200-3,220 in the near term,” Roelof-Jan van den Akker, senior technical analyst at ING Commercial Banking, said.