June 28, 2013 / 4:56 PM / 4 years ago

European shares suffer first quarterly loss in a year

3 Min Read

* FTSEurofirst 300 closes down 0.5 pct

* Index snaps monthly winning streak

* Stein comments buck trend of supportive Fed comments

* Tech weaker, led lower by Nokia on Blackberry disappointment

By Alistair Smout

LONDON, June 28 (Reuters) - European share prices fell on Friday to register the first quarterly loss in a year and first monthly loss since May last year, as investors worried about when central banks would stop pumping money into the markets.

The pan-European FTSEurofirst 300 index reversed early gains to close 0.5 percent lower at 1,152.17 points on Friday, a 5.3 percent drop for the month, hit particularly hard last week after the U.S. Federal Reserve laid out a possible timetable for turning down the taps on its $85 billion-a-month bond-buying programme.

Concerns over the programme were reignited on Friday by Fed official Jeremy Stein, who said the central bank should take a long-term view that the labour market is improving when it meets in September even if jobs data disappoints, perhaps bolstering the case for withdrawing some of the monetary stimulus by summer's end.

"Stein spoke very hawkishly ... and since that we've seen the market has dropped off," Mark Foulds, sales trader at ETX Capital, said.

"People do still see value, but the problem is that so much of it is still dependent on talk over whether the Fed will continue with its stimulus or slow it imminently."

The FTSEurofirst managed its first weekly gain in six weeks and its best weekly performance since mid-April, after a week which has seen several Fed officials play down the idea that it might be about to tread on the monetary brakes.

However Stein's comments bucked that trend, and a bag of mixed economic data from the United States kept trade choppy and the picture for the future of the so-called quantitative easing programme far from clear.

The volatility of the session was exacerbated by thin volumes as investors were reluctant to take firm positions ahead of the opening of a new quarter.

"We are at the end of a week, month, quarter and half. So here may be an element of ... holding off until next week which sees what is likely the most important piece of US data to affect both sentiment on QE3 (quantitative easing) as well as Fed policy - US Non-Farm Payrolls and Unemployment," Mike van Dulken, head of research at Accendo Markets, said in a note.

The Stoxx Europe 600 technology sector index led sectoral fallers on Friday, down 1.5 percent, led lower by a 3.8 percent drop in Nokia.

The Finnish phone maker weakened in afternoon trade, with traders citing a read-across from Research in Motion. Shares in the maker of Blackberry phones plunged 27 percent after reporting an unexpected quarterly operating loss.

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