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European shares ease as euro zone crisis back in focus
November 14, 2012 / 9:13 AM / 5 years ago

European shares ease as euro zone crisis back in focus

* FTSEurofirst down 0.3 pct, reversing Tuesday's gains
    * Banks lead fallers, with euro zone crisis in spotlight
    * Charts offer no signals for range breakout

    By Toni Vorobyova
    LONDON, Nov 14 (Reuters) - European stocks eased on
Wednesday, failing to hold the previous day's gains as
anti-austerity strikes across southern Europe and Greece's
unresolved debt crisis put the euro zone's troubles back in
    Strikes in Spain and Portugal shut schools and grounded
flights across the Iberian peninsula, while international
lenders continued to disagree over how long to give Greece to
get its debts down to a sustainable level. 
    Banks, the most directly exposed to swings in the euro zone
crisis due to their sovereign debt holdings, were the worst
performing sector in Europe, down 0.7 percent.
    The FTSEurofirst 300 was down 0.3 percent at
1,096.03 points by 0848 GMT, eating away at Tuesday's 0.4
percent rise which was its first daily gain in a week.
    The market was also weighed down by concerns about the U.S.
'fiscal cliff' of some $600 billion in planned tax hikes and
spending cuts which threaten to plunge the world's biggest
economy back into recession next year.
    "The failure to sustain any momentum ...suggests there is a
buyers' strike and they are staying on the sidelines, waiting
for a resolution either in Greece or in the U.S.," said Ioan
Smith, strategist at Knight Capital.
    The euro zone crisis has taken its toll on third quarter
company profits in the region, with German utility E.ON
 extending losses a day after warning of weaker power
demand in the region unleashed a string of ratings and target
price cuts. 
    Other fallers included oil major Shell  and
Irish budget airline Ryanair which on Wednesday traded
ex-dividend, meaning new investors will no longer qualify for
the latest payout. 
    But strong demand from North American helped lift sales at
Electrolux, boosting shares 2.6 percent.
    The technical picture on Europe's main indexes remained
inconclusive, with no clear end in sight to more than two months
of narrow range-trading. 
    The EuroSTOXX 50 benchmark of euro zone blue
chips eased 0.2 percent to 2,488.94, but held above the bottom
of the 2,440 to 2,570 range which it tried but failed to probe
on Tuesday.
    "We've hit the bottom of the range so we know we are going
to test at least the middle of the range and possibly even the
higher threshold. It's slightly more bullish than bearish
because we are bouncing off the support," said Valerie Gastaldy
at technical analysis firm Day By Day.
    "To escape from the range... we need money to flow from
bonds to equities and as long as I don't have that signal from
bond market I can't be sure that we are going to really break
above 2012 highs."

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