European shares hit by Fed hint at stimulus cut
LONDON Feb 21 (Reuters) - European markets opened lower on Thursday after hints from the U.S. Federal Reserve it may withdraw some of the easy money fuel that has helped drive the recent rally in equities.
Minutes of the latest Fed policy meeting published late on Wednesday showed a number of officials think the central bank might have to slow or stop buying bonds before seeing the pickup in hiring the programme is designed to deliver.
"The more important part of the minutes is the focus of excessive risk taking and the potential for instability. There has been several members of the Fed talking about creating a froth in risky assets (the derivative cost of the easy monetary policy), which is potentially as unstable as it was in 2008," Steen Jakobsen, chief economist at Saxo Bank, said.
"That froth in the risky assets probably fuelled to the large extent by the central banks, but to say it is totally overdone and replay of 2008 is an exaggeration," he said.
By 0802 GMT, the FTSEurofirst 300 was down 6.11 points, or 0.5 percent, at 1162.61, led lower by the banks which have been at forefront of recent gains, and the miners.