Euro­pean shares ease back af­ter roller­coaster week


Euro­pean shares eased on Fri­day, hav­ing al­ready re­couped all their losses from a bruis­ing eight per­cent drop ear­lier this week, with mar­kets cool­ing off de­spite hopes for more help from cen­tral banks.

The pan-Euro­pean FTSEurofirst 300 in­dex slipped 0.3 per­cent. The in­dex was broadly flat on the week but still down nearly 10 per­cent in Au­gust and at risk of its worst monthly loss in four years. The euro zone's blue-chip Euro STOXX 50 in­dex fell 0.1 per­cent while Ger­many's DAX weak­ened 0.3 per­cent, with the DAX some 16 per­cent be­low a record high reached in April.

Fears of a slow­down in global eco­nomic growth, which in­ten­si­fied af­ter China de­val­ued its cur­rency this month, sparked big price swings across eq­ui­ties, cur­ren­cies and com­modi­ties this week. Wor­ries over China have led to ex­pec­ta­tions that the US will not raise in­ter­est rates next month. This caused mar­kets to re­bound this week, but traders said the un­der­ly­ing con­cerns about a weaker eco­nomic out­look had not com­pletely dis­si­pated. "The prob­lems have not gone away...The move­ment of cur­ren­cies is still bub­bling away un­der­neath," said Paul Chesterton, a trader at bro­ker­age Pere­grine & Black. "It's a lit­tle bit of a re­al­ity check af­ter the strong re­cov­ery."

Ge­malto was one of Europe's worstper­form­ing stocks, drop­ping 5 per­cent af­ter sev­eral bro­kers cut their price tar­gets on the dig­i­tal se­cu­rity com­pany af­ter its first-half re­sults this week missed fore­casts. Energy stocks were the best per­form­ers, af­ter the price of oil had its big­gest one-day bounce since 2009 on Thurs­day.

Strate­gists pointed to ac­com­moda­tive mon­e­tary pol­icy and pock­ets of value in the wake of the sell-off as rea­sons to ex­pect more gains ahead. How­ever, they added there was still un­cer­tainty over how ex­actly a slow­down in China and emerg­ing mar­kets would hit the out­look for earn­ings.

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