* FTSEurofirst down 0.9 pct, Euro STOXX 50 down 1 pct
* DAX falls 1.6 pct after German unemployment rises
By Sudip Kar-Gupta
LONDON, June 28 European shares fell on
Thursday, as rising German unemployment caused the country's DAX
equity index to drop, and investors remained sceptical
that a political summit on Europe's debt crisis would be able to
agree concrete measures.
The FTSEurofirst 300 index fell around 0.9 percent
to 991.41 points, while the Euro STOXX 50 index
declined by 1 percent.
Germany's benchmark DAX index underperformed, falling 1.7
percent to 6,126.56 points.
Its decline was more than a 1.4 percent drop on France's
CAC-40 index, and came after data which showed that
German unemployment had risen for the third month in a row in
Central Markets senior broker Joe Neighbour said investors
had been selling the DAX due to the negative economic outlook
for Germany, which has been increasingly affected by the euro
zone debt crisis that has hit Greece and Spain.
"We're looking to sell into the DAX and first pushed through
some sales when it moved below 6,230 points," said Neighbour.
Phil Roberts, Barclays Capital chief technical strategist,
said the FTSEurofirst 300 index remained below its 200-day
moving average, indicating that traders felt it was likely to
fall further, although it could find support at the 985.95 point
"The market continues to consolidate below the range lows
from April. It is still below its 200-day moving average, but at
the moment the 21-day moving average, at 985.95, is providing
support. So we'll hold it in a new range as lower levels and it
looks like a bearish development," said Roberts.
TRADERS HOLD OFF BUYING EQUITIES DURING EU SUMMIT
European Union leaders gathered in Brussels for a summit on
how to tackle the region's debilitating debt crisis, but
constant signs of disagreement have led investors to expect the
meeting might fail to agree upon new concrete measures.
German Chancellor Angela Merkel has brushed aside demands
from Italy and Spain for rapid action to lower their soaring
borrowing costs, and poured cold water on proposals backed by
France that euro zone countries should assume joint liability
for each other's debts.
A German government source on Thursday became the latest
official to downplay expectations for the summit.
Francois Savary, chief investment officer at Swiss bank
Reyl, said the current political uncertainty in Europe meant now
was not a good time for investors to buy shares. Reyl is
underweight on European equities, compared to U.S. equities or
shares in emerging markets such as Asia.
"The current environment does not justify increasing our
equities exposure," said Savary.