* FTSEurofirst 300 off 0.1 percent
* StanChart weak, warns 2013 profits could fall on year
* U.S. data eyed for signals on Fed stimulus
By Tricia Wright
LONDON, Dec 4 European shares traded flat on
Wednesday, steadying after the previous session's steep losses,
with Asia-focused bank Standard Chartered the leading
decliner after it warned its profits were likely to fall.
Shares have been weakening on expectations the U.S. Federal
Reserve will soon start to scale back its bond-buying programme.
Investors realise the central bank will start reducing stimulus
at some point, but the timing remains open to question.
Standard Chartered sank 6.7 percent in robust trade as it
warned that profit would probably drop this year after Asian
growth slowed over the past five months.
"To our minds, the top-line growth headwind is the key issue
for Standard Chartered ... Potentially higher capital
requirements for the group also mean that it will be difficult
for the company to make headway on return on equity in the
short-term, we think," Shore Capital said in a note.
Trading volume in the stock was robust, at 1 1/2 times the
90-day daily average by 0934 GMT, against the broader
FTSEurofirst 300 at a fifth.
The FTSEurofirst 300 was off 0.1 percent at
1,279.82 points, having dropped 1.5 percent to 1,280.85 points
on Tuesday. That was its lowest close since Oct. 23 and its most
severe one-day percentage drop since Aug. 27.
The economic picture in Europe was mixed, with Germany
reporting its private sector grew at its fastest rate in nearly
2-1/2 years in November, while a recovery in the broader euro
zone private sector lost momentum. Italian and French service
sectors fell back into contraction.
Before Friday's key report on U.S. jobs in November, the
market will have a raft of U.S. data to deal with on Wednesday,
including the November ADP employment report at 1315 GMT and
both the ISM non-manufacturing index and new homes sales for
September and October at 1500 GMT.
Those releases could give some indications as to when the
Fed will start cutting its bond-buying programme, which has
supported the rally in stocks. It has said it will start the
process when certain economic data releases meet its targets.
Robust manufacturing data on Monday re-ignited speculation
the Fed could start the process before the end of the year. That
prompted a sharp sell-off in equities on Tuesday, and traders
say markets may not yet be completely prepared for an imminent
reduction of stimulus.
"My gut feeling is that we will probably get a reasonably
positive set of jobs figures come Friday, and if anything that
might just heighten fears that we could see a December taper,"
said Keith Bowman, an equity analyst at Hargreaves Lansdown. "We
should still get a little bit of downside."