European shares pare gains after Greek vote

Wed Jun 29, 2011 10:23am EDT

Related Topics

* FTSEurofirst 300 index gains 1.3 pct

* Bank shares pare gains after Greek vote

* Investors await Thursday's vote

By Joanne Frearson

LONDON, June 29 (Reuters) - European shares pared gains on Wednesday as investors took profits after Greece's parliament passed the first of two key bills needed to secure the next tranche of bailout funds and avoid a near-term default.

A second vote is due on Thursday on specific budget and privatisation measures and failure to pass the bill would stop the release of a crucial 12 billion euro aid package in July.

"We are selling the news, it was strongly expected the yes vote would pass," Matt Brown, trader at Catalyst Markets, said.

"But we still have a lot of obstacles to overcome and the austerity measures are going to be a hard pill to swallow for the Greek people. There is nervousness about the vote tomorrow, and a second bailout package for Greece has not been confirmed."

Heavyweight European bank shares trimmed gains after the vote, with the STOXX Europe 600 Banks index up 1.7 percent at 182.18 points, while Greece's share benchmark was up 0.3 percent, both off earlier session highs.

Support was seen at around 175 for the banks' index , its lowest level since July 2009 and a number it previously bounced off. Resistance was seen at 188, representing a 23.6 percent Fibonacci retracement from the index's high in February.

By 1355 GMT, the pan-European FTSEurofirst 300 index of top shares was up 1.3 percent at 1,094.37 points.

The index would likely find support at 1,066, its year low reached in March low following a heavy sell-off caused by the Japanese earthquake.

But it will face resistance at around 1,104, a level which it has struggled to go beyond since mid-June, when euro zone ministers failed to agree on how to share the costs of a new bailout for Greece.

============================================================ For rolling updates on what is moving European shares please click on ============================================================ For pan-European market data and news, click on codes in brackets: European Equities speed guide................... FTSEurofirst 300 index.............................. STOXX Europe index.................................. Top 10 STOXX sectors........................... Top 10 EUROSTOXX sectors...................... Top 10 Eurofirst 300 sectors................... Top 25 European pct gainers....................... Top 25 European pct losers........................

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