European shares nudged lower yesterday, held back by weak utilities and banks, although some strategists saw technical and other evidence of scope for renewed gains.
The STOXX Europe 600 Utilities Index and the Banks index were both among the worst performing European sectors, nursing respective falls of 0.6 and 0.7 per cent.
Utilities were knocked by a 3.3 per cent drop in Spanish power company Iberdrola, which traders attributed to signs that lender Bankia might be selling its stake in the company.
The FTSEurofirst 300 closed down 0.2 per cent at 1,161.39, around levels seen at the start of January. The eurozone’s blue-chip Euro STOXX 50 index shed 0.8 per cent to 2,615.26.
The consolidation of a seven-month rally has lasted several weeks now, and is also visible in the most recent data from EPFR Global showing European stock funds lost fans for a second straight week with outflows of $38 million.
However, continued loose monetary policy from central banks was one good reason to keep faith with the asset class, some said.
“I still remain fairly positive that after this pause markets will move higher,” Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets, said.
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