LONDON: European equities steadied on Wednesday after a volatile start to the week, with traders pointing to Chinese brokerages' measures to support China's battered markets and expectations of policy easing by major central banks.
European stocks have suffered a bruising end to the summer, falling more than 2 percent in the last two days after dropping about 10 percent since the end of July, but brokers and investors say there is still value in high-yielding blue-chip stocks at a time of central bank bond-buying in the euro zone.
The pan-European FTSEurofirst 300 index was down 0.07 percent at 1,391.58 points by 1034 GMT. National benchmarks in London, Paris and Frankfurt were flat to 0.1 percent higher.
China, the epicentre of worries over the global growth outlook, enjoyed a late market recovery after nine Chinese brokerages pledged to buy more than 30 billion yuan of shares, according to the China Securities Journal. That eased investor fears that Beijing may be intensifying a trading crackdown. "The general level of volatility is going to stay for some time. People are still nervous despite several policy responses in China, but in the short term we shouldn't close at another bottom,"
CLAIRINVEST fund manager, Ion-Marc Valahu, said. "We had a lot of shorts on European indices such as the DAX and the CAC and used the last week's pullback to cover most of it.
We are long at this point and are just waiting for some catalysts to add more."
Traders also said that hopes were growing for more central bank action. Bets that the US Federal Reserve could raise rates as early as this month are being scaled back, while the ECB is expected to take a more dovish stance after its policy meeting this week, they said.
"(ECB chief) Mario Draghi will probably hint, if not say, that if markets continue being in turmoil there will be more QE (bond-buying)," Peregrine & Black trader, Markus Huber, said.
Among standout features, shares in Belgium's UCB rose 3.7 percent, to be the top gainer in the FTSEurofirst 300, after Amgen said its experimental bone drug, being developed with UCB, was found to be more effective than an already marketed drug in a late-stage study.
Deal-making hopes also propped up equities, with Alstom up 2.2 percent after a report in the Financial Times said its sale of energy assets to General Electric was set to get the green light.
ASOS shares fell 3.7 percent as its chief executive stepped down after 15 years in which he transformed the Internet minnow into a retail powerhouse.
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