European shares at 7-week lows on stimulus woe

LONDON, June 13 Thu Jun 13, 2013 3:12am EDT

LONDON, June 13 (Reuters) - European shares sold off again on Thursday with banks and commodity stocks, sectors most exposed to the broader economic fortunes, the top fallers on concerns about stimulus unwinding and Greek political turbulence.

By 0705 GMT, the FTSEurofirst 300 was down 18.30 points, or 1.6 percent at 1,156.49, led by miners down 2 percent and banks down 1.8 percent.

The broader index has fallen nearly 8 percent since mid-May and was just 13 points off retracing the gains enjoyed since mid-April, in a sign of how reliant and sensitive markets have become to monetary policy.

Worries over the political stability in Greece reared their head again, although Peel Hunt's equity strategist Ian Williams said the concerns over when stimulus withdrawal will occur in the United States remained the key focus for investors.

"Low volumes and high volatility will remain the order of the day at least until next week's FOMC (Federal Open Market Committee) meeting, with technical considerations set to dominate," he said.

The FTSEurofirst 300 has crashed through the 61.8 percent Fibonacci retracement of the rally that began in mid-April and topped out in mid-May, with the next level of real support being the 200-day moving average around 1,155.

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