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.