European Shares Flat Early

European shares were flat in morning trade on Friday, failing to bounce back after Thursday’s selling prompted by anxiety over slow growth, low inflation and hefty valuations.

The pan-European Euro Stoxx 600 Index was flat with traders cautious on equities going into the weekend. Core fixed income assets seem to be the main beneficiary from a recent wobble in global sentiment. Stocks in Europe have dropped lower for the past two days as well as the euro with investors considering whether the European Central Bank (ECB) will announce further monetary stimulus at its next meeting in June.

Some lackluster growth figures for Greece, France, Italy and the Netherlands added to the pessimism on Thursday, as well as an ECB survey of professional forecasters which cut its outlook for inflation in the region over the next few years. As traders flocked to “safe havens” like government bonds, financial stocks were badly hit as the sector is traditionally more profitable in a higher-yield environment.


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