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Europe shares slip for 4th day on recovery concerns

Published 09/24/2010, 04:43 AM
Updated 09/24/2010, 04:44 AM

* FTSEurofirst 300 down 0.3 pct; falls for fourth session

* Financials, miners feature among top decliners

* Recent disappointing economic data adds to worries

* For up-to-the-minute market news, click on

By Atul Prakash

LONDON, Sept 24 (Reuters) - European stocks declined for a fourth straight session on Friday, led lower by miners and banks as the latest U.S. jobless claims figures added to persistent concerns that the global economic recovery was still fragile.

At 0814 GMT, the FTSEurofirst 300 index of top European shares was down 0.3 percent at 1,062.94 points after falling to a low of 1,060.19 earlier in the session.

The index is on track to close the week in negative territory for a second time in a row and is up just 1.4 percent this year.

The index pared some losses after data showing German business sentiment rose unexpectedly in September, but overall market sentiment stayed bearish.

Miners topped the list of fallers, with investors selling shares on concerns that slower economic recovery would hurt global demand for raw materials. Anglo American, Antofagasta, Rio Tinto, Xstrata and ENRC fell 1.1 to 2.7 percent.

"Yesterday's U.S. jobless figures just added a little fuel to the fire. Concerns over Ireland are still very much there in the background," said Keith Bowman, equity analyst at Hargreaves Lansdown. "Investors are going to remain very data-sensitive.

"Consensus is for a relatively slow growth, but investors are still trying to piece together some sort of picture for the outlook. Some caution is still necessary."

Figures showed on Thursday that U.S. jobless claims unexpectedly rose in the latest week, a sign the labour market still faces headwinds. Existing-home sales rose in August, but from depressed levels.

Investors also became cautious after data showed the Irish economy, already hit by worries about the cost of bailing out its banking sector, shrank 1.2 percent in the second quarter, raising questions whether the government can continue to cut spending to tackle its debt problem.

Irish debt came under renewed pressure on Friday, sending their 10-year bond yield spreads over German Bunds to euro lifetime highs.

TECHNICAL SUPPORT

The Thomson Reuters Peripheral Eurozone Countries Index fell 0.2 percent, while both Germany's DAX and France's CAC 40 were down 0.1 percent.

Britain's FTSE 100 fell 0.1 percent to 5542.87 points. Analysts said a break of 5,498 would signal a bearish market trend.

"The bulls are not ready to give up support at 5,500 and prices are rallying above this level, setting up a range between 5,500 and 5,550," said Raghee Horner, chief market analyst at Autochartist.

Financial stocks featured among the top losers, with the STOXX Europe 600 banking index falling 0.2 percent on worries that a patchy economic recovery could hurt banks.

Sentiment also worsened on news that Britain's banks will be subject to a wide-ranging probe that will examine the possible break-up of retail and investment banks and ways to boost competition.

Barclays, BNP Paribas, Commerzbank and Allied Irish Banks fell 1 to 2.3 percent. "We could be due a bit of consolidation in the markets at least until the start of the third quarter earnings season next month which may prove to be the defining line in how the markets finish the year," said Joshua Raymond, strategist at City Index. (Editing by Michael Shields)

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