European shares up, investors look for dovish Draghi tone
LONDON, July 4
LONDON, July 4 (Reuters) - European shares climbed higher early on Thursday, recovering most of the losses incurred over the previous two sessions, as recent underperformers such as autos and miners rebounded.
The FTSEurofirst 300 rose 10.45 points, or 0.9 percent, to 1,161.35, having fallen 1.1 percent since Tuesday, but political unrest in Egypt and European debt concerns surrounding Greece and Portugal were likely to cap upside momentum.
Volumes were expected to be thin too, with the U.S. market closed on Thursday for the Independence Day holiday and ahead of rate decisions and statements by the European Central Bank and the Bank of England later in the session.
Although no policy changes are expected from both the central banks, investors will be looking for dovish tones from the ECB president Mario Draghi to help calm markets after bond yields in peripheral euro zone countries rose.
"I am expecting some healing words from Draghi, which should calm fears over the situations in Portugal and Greece because it is a very psychologically driven market," Rolf Bland, chief investment officer at VZ Vermogenszentrum in Zurich, said.
"I don't think any new stimulus measures will be on the table, but it is a question of words and making clear once again that everything will be done (to save the euro) and interest rates and policy will remain accommodative, which will be very helpful at this moment," he said.