Shares in watchmaker Swatch Group fall more than 3 percent, lagging a 0.4 percent rise in the European sector index, as investors take profits and concerns about the impact of the strong Swiss franc weigh.

Watch by Swatch

"It is the currency issue and probably also a fair bit of profit-taking," Kepler Capital Markets analyst Jon Cox says, adding that Swatch Group has strong pricing power for its high-end timepieces but may face tough competition for lower-priced models.

Shares in rival luxury group Richemont fall 0.6 percent.

Swatch Group Chief Executive Nick Hayek has repeatedly warned of the far-reaching consequences a soaring Swiss franc may have for Switzerland but confirmed the watchmaker was aiming for another record year in 2011.