July 2, 2012 / 7:11 AM / 5 years ago

European shares rally stalled by Chinese data

LONDON, July 2 (Reuters) - European equities steadied around seven-week highs on Monday, as investors balanced the threat to global growth from weak Asian data against last week’s unexpected raft of new measures to battle the euro zone crisis.

The FTSEurofirst 300 was up 0.1 percent at 1,022.68 points by 0704 GMT, after posting its biggest daily gain in seven months on Friday on the back of the euro zone measures.

“We probably have some squeeze potential for the market that could provide the move that we saw last week some legs, but there are some caveats,” said Gerhard Schwarz, equity strategist at Baader Bank.

“The data out of Asia certainly is still showing that, in particular in China, sentiment is deteriorating. For investors still there is the risk that the move (up) is not a lasting one and the economic headwinds might intensify over the next couple of months  It is an environment where only the flexible investors are able to make money, so a lot of long only investors will be sitting on the sidelines.”

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