OREANDA-NEWS. March 26, 2015. European shares retreated further from 7-1/2-year highs hit last week as a rebound in the euro pegged back stock markets, while Hermes lost ground after disappointing results.

Shares in the French luxury goods maker fell 1 percent after Hermes, which has a strong business presence in Japan, said foreign exchange rates had impacted its margins.

Germany's DAX equity index, which hit a record high of 12,219.05 points last week, fell 0.3 percent to 11,965.67 points.

Data on Wednesday showed German business morale rose for the fifth month in a row in March, hitting its highest level since July 2014, while French business morale stood at its highest in nearly three years in March.

On Tuesday, figures showed Germany's private sector grew in March at its strongest rate since July.

However, the strong German data has contributed to a rebound in the euro on currency markets, which in turn has impacted the DAX as a weaker euro is more beneficial to German exporters.

"A strong euro is generally bad for the DAX, and it's giving investors an opportunity to take some profits," said Hantec Markets' analyst Richard Perry.

"But I don't think this will change the longer-term picture for the DAX, which should continue to perform well going forward," added Perry.

SOLID STEEL

The pan-European FTSEurofirst 300 was down by 0.4 percent at 1,597.78 points going into the middle of the trading session.

The index has soared 17 percent, helped by the European Central Bank's decision to buy back government bonds, in order to inject more liquidity into markets and boost the region's economy.

"The macro newsflow in Europe is quite positive, but after such a rally the market needs to catch its breath. At this point a pause is needed, while the medium-term trend remains very positive," said IG France chief market analyst Alexandre Baradez.

Accor fell 2.9 percent after Eurazeo and Colony Capital sold a near 10-percent stake in the hotel group.

But shares in steel companies Acerinox, Outokumpu and Aperam all rose after Europe said it will impose punitive anti-dumping duties on stainless steel cold-rolled sheet from China and Taiwan.

The EU will apply tariffs of about 24-25 percent for imports from China and of about 11-12 percent for Taiwanese product, following a complaint lodged in May 2014 by the European steel producers association, Eurofer.