* FTSEurofirst down 0.2 percent
* China data heightens slowdown fears
* African Barrick sparks M&A interest in Gold miners
By David Brett
LONDON, Aug 16 European shares edged marginally
lower on Thursday in quiet trade as the recent rally lost steam
waiting for central banks to act to boost growth and with China
warning overnight its trade outlook for 2012 was worsening.
By 0758 GMT, the FTSEurofirst 300 was down 2.24
points, or 0.2 percent, at 1,098.50, pausing after recent gains
which has taken the index close to 2012 highs.
Equity indexes have rallied strongly since late July, on
expectations of further monetary stimulus from central banks
after European Central Bank chief Mario Draghi pledged to do
"whatever it takes" to protect the euro from Europe's sovereign
Chinese premier Wen Jiabao raised expectations of some form
of stimulus after he said the country continued to face
"headwinds" despite cooling inflation, with market participants
saying an imminent cut in bank reserve ratios was likely.
"There is not much impetus (given recent gains), it is
volume led and it is just a wait and see to find out the weather
the central banks come up with goods, so for the time being
there is not going to be much commitment or much risk taken,"
Yusuf Heusen, senior sales trader at IG Index, said.
This week has seen some of the lowest daily volumes on
European bourses in the past six years. Wednesday was the
seventh slowest day for turnover on EuroSTOXX 50 and
the fourth on FTSEurofirst since 2006 - outside of the
traditionally quiet year-end periods - according to Reuters
The recent European equities rally, driven by expectations
of monetary stimulus, may wane if policy action is delayed or
disappoints, leading investors to take profit on a fully valued
European stock market, S&P Capital IQ said.
It said European equities' valuations look "full", with the
pan-European Standard & Poor's 350 index trading at
10.8 times its expected earnings for the next 12 months versus
multiples of 8.3 and 10.9 seen at the beginning and end of the
period in which the ECB offered cheap loans under its LTRO
Heavyweight banks waned after recent gains and weak
results - second-quarter year-on-year growth contracted 31.6
percent - have taken their PE ratio up to 11.2 times, leaving
the index nursing slight losses on Thursday.
Miners were the standout performers on an otherwise
dull European shares index, bouncing after falls on Wednesday
with Fresnillo and Randgold up as African Barrick Gold sparked
M&A interest in the sector.
IG's Heusen said the main flows were coming in specific
stocks with the likes of Randgold and Fresnillo
, up 0.9 percent and 0.7 percent, respectively, helped
higher after Canada's Barrick Gold said it is in preliminary
discussions with China National Gold Group Corporation over its
74 percent stake in unit African Barrick Gold, the
world's largest gold producer.