European stock rally pause; further gains eyed

PARIS Mon May 6, 2013 3:10am EDT

PARIS May 6 (Reuters) - European shares dipped in early trade on Monday as investors took a breather following the previous week's rally to multi-year highs, with further gains seen in the medium term on the back of strong support from central banks.

Trading volume was expected to be thin with the UK stock market, Europe's largest, closed due to a national holiday.

The euro zone's blue chip Euro STOXX 50 index was down 0.3 percent at 2,755.68 points, retreating from a near-two year high hit on Friday following better-than-expected U.S. jobs data.

"Now that the index crossed above its 2013 high, the mood is definitely bullish," said Guillaume Dumans, co-ahead of 2Bremans, a Paris-based research firm using behavioural finance to monitor investor sentiment.

"Central bank action is the main reason behind the rally, and it eclipses for now any worries about the macro economy."

German industrial gases producer Linde rose 2.2 percent after posting better-than-expected results.