European shares steady after Ukraine-led swings, Adidas drops

LONDON, March 5 (Reuters) - European stocks edged slightly lower on Wednesday, steadying after wild swings during the previous two sessions, as tensions over potential conflict in Ukraine appeared to ease, with Adidas (Other OTC: ADDDF - news) among the biggest fallers.

The German sporting goods retailer fell 3 percent it warned its 2014 results would take a significant hit from weakening emerging market currencies such as Russia's rouble.

The pan-European FTSEurofirst 300 edged lower, down 0.2 percent to 1,342.42 by 0805 GMT.

European stocks had surged on Tuesday, reversing a big portion of the previous session's sharp losses after Russian President Vladimir Putin said he would use force in neighbouring Ukraine only as a last resort.

Putin's first comments on the crisis over the Ukrainian region of Crimea, interpreted as an attempt to reduce tensions, helped fuel a rebound in equities worldwide.

However, analysts warned there could still be volatility, with U.S President Barack Obama saying on Monday that Russia violated international law, warning the U.S. government would look at a series of economic and diplomatic sanctions to isolate Moscow.

"If you look at the comments last night from Obama, that Putin is not fooling anybody... then there is still a little bit of sensitivity in the markets," Brenda Kelly, chief market strategist at IG (LSE: IGG.L - news) , said.

"Markets are quite vulnerable to downside if we see any escalation of what's going on in Ukraine."