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European shares inch higher ahead of ECB
August 1, 2012 / 3:40 PM / 5 years ago

European shares inch higher ahead of ECB

LONDON, Aug 1 (Reuters) - European shares saw modest gains on Wednesday, in light trade, as investors waited to see if policymakers will back up pledges to support the euro zone with concrete measures.

Markets have rallied strongly in recent days after comments by European officials, including ECB chief Mario Draghi, raised expectations the bank will announce steps to lower the borrowing costs of indebted Spain and Italy when it meets on Thursday.

The FTSEurofirst 300 provisionally closed up 0.4 percent at 1,068.07, having traded within a narrow range, in volume at only 60 percent of the 90-day daily average, with investors holding back as the ECB meeting draws near.

“I get the feeling from the markets and the way that they have been trading all of this week, since the (Draghi‘s) statement, that there’s attentiveness - people are expecting good things,” said Derek Hammond, head of institutional equity flows at Societe Generale.

“If he now comes and delivers something positive, there is no reason why (investors) would cut their positions in anything... People will begin to step back into the European markets.”

Market participants were also waiting for the conclusion of a two-day U.S. Federal Reserve meeting on Wednesday. The Fed is likely to show it is ready to act against a weakening U.S. economy, but stop short of aggressive measures for now.

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