Global shares set for weekly losses as growth concerns weigh

Fri Oct 12, 2012 6:33am EDT
 
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By Marc Jones

LONDON (Reuters) - European shares and the euro steadied on Friday, with both on course to end the week down as worries about the euro zone's crisis strategy, the upcoming U.S. election and slowing global economic growth limit the appeal of riskier assets.

A central bank stimulus-inspired rally that pushed global equities up around 15 percent since early June has stalled this week as investors wait to see whether yet-to-be-deployed ECB bond purchases can calm the euro zone's crisis and whether stuttering global growth will revive.

Having enjoyed a 1.2 percent gain on Thursday, the Euro STOXX 50 index of top European blue-chips had dropped back 0.2 percent to 2478.57 points by mid-morning, leaving it on course to end the week 1.4 percent lower.

"With concerns over the state of the global economy coming to the fore this week, along with negative sentiment surrounding a Chinese slowdown, and earnings season and the fiscal cliff garnering negative attention in the U.S., visibility for equity markets in the short term remains clouded to say the least," said Daniel Victory at Capital Spreads in London.

London's FTSE 100 .FTSE, Frankfurt's DAX .DAX and the CAC in Paris .FCHI were all in negative territory and MSCI index of global stocks .MIWD00000PUS was flat.

Japan's Nikkei .N225 fell to its lowest level in more than two months in Asian trading, while U.S. stock futures pointed to a fractionally higher open on Wall Street where the main focus will be on JP Morgan earnings, the University of Michigan's preliminary consumer sentiment survey and September PPI data.

CORRECTIVE BOTTOM

Many markets have become stuck in ranges since the start of the month as investors wait to see whether Spain requests a bailout, a prerequisite for the ECB to buys its bonds.   Continued...

 
Traders work on the floor of the New York Stock Exchange at the opening of the trading session in New York October 5, 2012. REUTERS/Mike Segar