LONDON, March 10 (Reuters) - European equity investors are likely to be cautious at the start of the week, with shares seen holding steady due to continued tension in Ukraine and poor exports data from China that revived concerns about slower economic growth.
Russian forces tightened their grip on Crimea, seizing another border post and a military airfield, while figures out over the weekend showed a surprisingly sharp drop in exports tipped China’s trade balance into a deficit.
Basic resources stocks are expected to see a sell-off, tracking a sharp decline in base metals prices following the export figures from China, the world’s biggest consumer of industrial metals.
“The negative cues seem to be stacking up. China, Ukraine and a good non-farms pointing to no slow down in (stimulus) tapering are not a conducive environment for bulls,” Capital Spreads dealer Jonathan Sudaria said in a note, referring to Friday’s better-than-expected U.S. jobs data.
“Supporting markets is the mentality that equities are the only game in town, so for now the ‘buy the dips’ strategy looks to be holding.”
Capital Spreads predicted Britain’s FTSE 100 and Germany’s DAX to open flat and France’s CAC 40 to gain 5 points, or 0.1 percent.
The FTSEurofirst 300 index of top European shares finished down 1.3 percent at 1,326.70 points on Friday.
Europe bourses in 2014:
Asset performance in 2014:——————————————————————————————————————— > Equities slide on disappointing China trade data, Ukraine crisis > S&P 500 ends at another record after strong jobs data > Nikkei retreats from 5-week high on China data, Ukraine worries > Yields highest in six weeks after solid jobs gains > Yen in favour as weak China, Japan data sap risk appetite > Gold drops as U.S. growth optimism weighs, China sells > Shanghai copper slides 5 pct on China concerns > Brent slips towards $108 on China data; supply concerns cap fall