European shares cling to gains as jitters linger
By Marc Jones
LONDON (Reuters) - European shares clung to slender gains on Wednesday as disappointing Christmas retail sales took the gloss off the best euro zone PMI figures in 2-1/2 years and calmer conditions in emerging markets.
Overnight trading in Asia had been mixed despite a rebound on Wall Street, and European nerves were beginning to wobble again as a sharp drop in December shop sales added to caution before the European Central Bank's monthly meeting on Thursday.
The euro inched lower and the FTSEurofirst 300 share index .FTEU3 was up just 0.2 percent. It had earlier climbed 0.4 percent after Markit's euro zone Composite PMI, which gauges business activity across thousands of companies, brightened the market mood.
The survey showed the 18-member bloc's recovery becoming increasingly broad-based, with Germany leading an upswing in peripheral members and signs of a stabilization in number two economy France.
Retail data shortly afterwards disappointed, however, with a 1 percent fall in December sales compared with a year before highlighting the pressure still on consumers.
"Technically, the market is clearly 'oversold', and investors should be rushing in," said Jeanne Asseraf-Bitton, head of global cross-asset research at Lyxor Asset Management.
"But the problem is the global economic recovery that everyone was betting on just a few weeks ago doesn't seem to be as smooth as expected."
The mixed signals from Europe followed data hiccups from the United States and China, the world's biggest economies, earlier this week. Continued...