* FTSEurofirst down 0.1 percent
* Fiat, Sonova fall as peers' earnings dip
* Bankia up on expectations of cash injection
* Fresnillo, Rangold up as precious metals M&A hots up
By David Brett
LONDON, Aug 16 European shares stalled on
Thursday following a rally that has taken equity markets close
to 2012 highs on expectations central banks will take action to
boost flagging growth.
By 1041 GMT, the FTSEurofirst 300 was down 1.5
points, or 0.1 percent, at 1,099.28, with trading volumes at
barely 20 percent of their 90-day average.
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
European stocks have rallied 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 the bloc's sovereign debt
"Time will tell whether "Super Mario" will be able to
deliver on his near promise of printing money, but as with
everything in Europe nowadays, nothing is so straight forward,"
David Man, partner at RMG Wealth Management, said.
Shares of Bankia, Spain's largest nationalised
lender jumped nearly 12 percent in heavy trade, leading the
banking sector higher and building on its 75 percent gain this
month, on speculation it is about to receive an emergency cash
injection from Europe.
The UK's FTSE 100 index and France's CAC 40 index
are close to triggering a bullish technical signal known
as a 'golden cross', as their 50-day moving averages are a few
points from crossing above their 200-day moving averages.
The expected cross, used by a number of algorithmic trading
programmes as an automatic 'buy' trigger, would follow a similar
bullish signal on Germany's DAX which was triggered 10
days ago and would confirm a shift in mid-term momentum, usually
signaling gains six months down the road.
Equity gains and a weak earnings season has left the
pan-European STOXX 600 index trading at 10.14 times its
expected earnings for the next 12 months, a level last seen last
year and within one standard deviation of its 10-year average,
Datastream data showed.
Earnings news hit certain stocks with Switzerland's Sonova
the top faller, down 3.1 percent on a readacross from
Danish hearing aid maker William Demant Holding, which
missed forecasts for first-half profit growth.
Truck and tractor maker Fiat Industrial shed 2.5
percent with traders citing a readacross in reaction to
disappointing results from competitor Deere & Co.
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.
Randgold and Fresnillo, up 0.9 percent and
0.7 percent respectively, were helped higher after Canada's
Barrick Gold said it was in preliminary discussions
with China National Gold Group Corporation over its 74 percent
stake in unit African Barrick Gold, the world's largest
The miners were also helped by talk of some form of monetary
policy easing in China after Chinese premier Wen Jiabao said the
country continued to face "headwinds" despite cooling inflation,
with market participants saying an imminent cut in bank reserve
ratios was likely.
Graphic of asset returns in 2012:
Euro zone debt crisis in graphics: