European shares consolidate after rally

LONDON, June 26 Wed Jun 26, 2013 3:09am EDT

LONDON, June 26 (Reuters) - European shares steadied on Wednesday, consolidating the previous session's strong gains, with robust U.S. data continuing to support sentiment but investors wary of big bets after a month-long market rout.

U.S. durable goods orders, new home sales and consumer confidence all rose more than expected, offering some reassurance to investors that the world's biggest economy may indeed be strong enough to cope if the Federal Reserve starts to scale back its stimulus programme.

There was also some comfort from the other area of major recent concern - China - where a central bank pledge to prevent any lasting credit crunch helped calm markets.

The FTSEurofirst 300 was flat at 1,130.37 points by 0706 GMT, after a rallying 1.2 percent the previous day and trimming its slump from May's 5-year peak to 10 percent.

"It was a hard time for equity markets because two major support factors were suddenly in doubt - central bank liquidity provision and the Chinese growth engine. These worries will likely calm down somewhat over the next couple of days," said Gerhard Schwarz, head of equity strategy at Baader Bank.

"I think there is an attractive trading opportunity, but not yet an investment opportunity. A bounce is possible and things will not develop as quickly as fears have developed but I think there will be more downside into the third quarter."

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