European stocks claw back ground as markets steady
By Marc Jones
LONDON (Reuters) - European stocks, bonds and the dollar traded more calmly on Monday after last week's turbulence, though another 3 percent dive in Japan's Nikkei kept investors on edge.
While evidence mounts that a mid-year slowdown is taking place in the world economy, UK and U.S. holidays kept European equity and bond markets quieter than usual.
The FTSEurofirst 300 index of top European shares gained 0.3 percent as last week's falls tempted buyers, while demand for safe-haven 10-year German government bond futures eased and Italian and Spanish bonds strengthened.
The dollar was steadier, though it dipped to below 101 against the yen as the latest lurch in Japanese equities encouraged investors who have been unwinding their dollar hedges and heading for bonds.
The 3.2 percent drop on Tokyo's Nikkei brought its losses since Thursday to more than 10 percent, though it is still up 35 percent this year.
"Markets are currently experiencing difficulty fully and precisely understanding both the pace of global growth and the implications of central banks' activism," Credit Agricole said in a note.
"Expectations cannot remain stable for long and so investors should be prepared for periods of higher volatility in particular asset classes," they added.
In commodity markets, Brent crude slipped towards $102 per barrel, extending last week's 2 percent drop, as a weak economic outlook in a well-supplied market pressured prices. Continued...