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European shares edge off highs, spooked by Fed officials
May 17, 2013 / 7:10 AM / 4 years ago

European shares edge off highs, spooked by Fed officials

LONDON, May 17 (Reuters) - European equities edged off multi-year highs on Friday, spooked by poliycmakers talking about the possible future removal of monetary stimulus - the key driver of the market rally - in the United States.

Three hawkish Federal Reserve officials called for the U.S. central bank to halt bond purchases as soon as the summer, sending Wall Street lower overnight and souring risk appetite.

With the weekend looming, the remarks gave investors an excuse to take profits on some 9 percent of gains in European stocks in the past month which had pushed key indexes into overbought territory.

However losses were seen capped by continued strong investor appetite to buy the markets on any dips, as well as by the fact that the end of stimulus is not yet seen as a consensus view at the Fed and the hawkish comments have generally come from non-voting members.

The FTSEurofirst 300 was down 0.3 percent at 1,242.39 points by 0705 GMT, retreating from the previous session’s 5-year peak of 1,247.57 but still on track for a weekly gain.

“There is a bit of profit-taking, it’s no real surprise to see the markets a bit softer ... (But) for the last few weeks, any downtick has been bought and, if we do get some significant fall-off today, I wouldn’t be surprised to see some buyers come in,” said Vinay Sharma, trader at Gekko Capital Markets.

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