European Shares End Lower As Bernanke Disappoints

by
Reuters
European shares finished lower in thin trade on Tuesday after the U.S. central bank gave no signs it was any nearer to launching fresh monetary stimulus measures to support the fragile economic recovery.
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European shares finished lower in thin trade on Tuesday after the U.S. central bank gave no signs it was any nearer to launching fresh monetary stimulus measures to support the fragile economic recovery.

Federal Reserve Chairman Ben Bernanke told politicians, again, that it stood ready to act and that the recovery was being held back by tighter financial conditions due to Europe's debt crisis and uncertainty around U.S. fiscal policy.

Equity markets had gained in the previous sessions on hopes recent weak U.S. data, including Monday's retail sales, would prompt the Fed to move closer to launching a third round of outright bond purchases, a form of stimulus known as quantitative easing (QE).

"The initial market reaction is negative for risky assets as market participants had hoped for more details," Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets in Brussels, said.

"Nevertheless, it has not changed the consensus that more QE will be coming. This will make the remainder of the year a fight between weak economic fundamentals and the prospect of more monetary easing," he said.

The FTSEurofirst 300 index of top European shares provisionally finished 0.3 percent lower at 1,040.32 points. Trading volumes were 61 percent of its 90-day daily average.