LONDON Jan 9 European shares steadied near a
5-1/2-year high on Thursday, with investors staying on the
sidelines before policy meetings that could provide hints about
future actions by the European Central Bank and the Bank of
Both central banks are likely to keep interest rates on hold
later in the day, but the ECB is expected to remind markets its
policy could ease further if inflation stays too low or money
market conditions tighten.
"Bulls are hoping for a very dovish ECB as they will have to
start fighting deflation this year. Longer term, we expect more
expansionary action from the ECB and that will be one of the
major elements driving European stock market outperformance,"
Philippe Gijsels, head of research at BNP Paribas Fortis Global
Markets in Brussels, said.
"However, in the short-run they may be a little bit
disappointed as with a slightly weaker euro and much tighter
peripheral spreads, the sense of urgency, to a large extent, has
At 0803 GMT, the pan-European FTSEurofirst 300 was
flat at 1,321.49 points, trading just below its 5-1/2 year high
scaled in the previous session. But Portugal's PSI 20
climbed 0.7 percent on rising confidence about a recovery in
peripheral euro zone economies.
Among individual movers, British grocer WM Morrison
fell 7.1 percent, the top decliner on the FTSEurofirst 300
index, after posting a sharp fall in like-for-like sales over