European stocks slip from 28-mth high; miners drop

* FTSEurofirst 300 falls 1.3 pct; lowest close in a week

* Miners among top decliners as metals prices fall

* Eiffage gains 4.5 percent after winning contract

By Atul Prakash

LONDON, Jan 19 (Reuters) - European shares ended lower after hitting 28-month highs on Wednesday, as disappointing figures from Goldman Sachs and a fall in U.S. housing starts hurt sentiment and prompted some investors to take profits.

But analysts said the overall market trend remained positive and equities will soon bounce back, boosted by broadly encouraging company results and an improving macroeconomic outlook.

The FTSEurofirst 300 <.FTEU3> index of top European shares ended 1.3 percent lower at 1,152.48 points, the lowest close in a week, after hitting 1,170, the highest since September 2008.

Miners featured among the top losers, tracking losses in key metals that fell on U.S. economic data. The STOXX Europe 600 Basic Materials index <.SXPP> dropped 2.6 percent, while Anglo American dropped 3 percent.

"This is just a blip in the market which is otherwise drifting higher. What we are seeing now is some profit taking and I would not read too much into that," said Klaus Wiener, chief economist at Generali Investments.

"What supports equities is a sound macroeconomic environment and that is still in place. I think the earnings season will be quite favourable and will support the market. Profit margins are still high and demand is improving."

Goldman Sachs posted a 53 percent decline in quarterly profit as trading revenue tumbled, but its results were broadly encouraging. According to Thomson Reuters, 61 percent of S&P 500 firms <.SPX> that have reported earnings beat expectations. Earnings growth is likely at 32.2 percent in the fourth quarter.

Figures showed groundbreaking on new U.S. home construction fell more than expected in December to its lowest in more than a year. Building permits, however, soared, providing a hint of optimism about future demand. [ID:nN19195756]

"Short-term sell off in European shares is driven by profit taking and overbought market conditions," a London-based trader said. "The market's outlook depends on the political future of countries such as Greece, Spain and Portugal."

GREEK RESTRUCTURING

Officials in Germany's finance ministry are working on contingency plans to handle the fallout in case Greece defaults or needs to restructure its debt, sources with direct knowledge of the matter said. [ID:nLDE70I158]

Greek shares <.ATG> jumped 4.5 percent, while the Athens stock exchange's banking index <.FTATBNK> gained 5.8 percent. National Bank , the country's biggest lender, advanced 6 percent, while the Thomson Reuters Peripheral Eurozone Countries Index <.TRXFLDPIPU> was up 1.2 percent.

Technical indicators showed that the stock market could suffer further losses. The euro zone's blue-chip Euro STOXX 50 <.STOXX50E> index -- which had jumped 7 percent in six sessions -- was down 0.7 percent at 2,923.76.

The index had been close to being 'overbought', with its relative strength index (RSI) at 60 on Wednesday. Seventy and above is considered 'overbought territory' -- while its slow stochastic, an indicator of short-term trends, showed the index was ripe for a pull-back.

"We are losing steam. The rise since December has been almost uninterrupted, with very few consolidation sessions. The optimism is reaching a paroxysm, which is never a good sign," said Alexandre Le Drogoff, technical analyst at Aurel BGC.

Dutch electronic chip-making equipment group ASML Holding fell 6.8 percent as investors took profits from gains of more than 50 percent since September. The shares rose earlier in the day after ASML said profits hit a record 1.02 billion euros ($1.37 billion) last year. [ID:nLDE70H21L] (Additional reporting by Blaise Robinson in Paris; Editing by Mike Nesbit)