European shares pause after bumper week; Erste sinks on warning

LONDON, July 4 Fri Jul 4, 2014 3:11am EDT

LONDON, July 4 (Reuters) - European stocks paused for a breather on Friday after brisk gains since the start of July set key regional indexes on course for their biggest weekly gains in several months and close to major technical resistance levels.

Shares in Erste Group Bank sank by more than 10 percent after emerging Europe's third-biggest lender warned it will post a record loss this year due to fresh hits from Hungary and Romania.

It was the top faller on the pan-European FTSEurofirst 300 index, which was down 0.1 percent at 1,396.67 points at 0707 GMT. The index was still up 1.8 percent for the week, its biggest weekly gain since March and close to a 6-1/2 year highs.

Strong U.S. economic data and supportive rhetoric from the European Central Bank have fuelled a rally in European equities this week, catching some investors by surprise after a dip in June had led some to believe the rally was losing momentum.

Trading activity was expected to be low on Friday, with the U.S. stock market, the world's largest, shut for a national holiday. (Reporting by Francesco Canepa; Editing by Sudip Kar-Gupta)

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