European shares edged higher in thin trade on Monday, though strategists said worries about the effects of the eurozone sovereign debt crisis would cap any further gains in the short term. The FTSEurofirst 300 index of European shares rose 0.1 percent to close at 957.45 points, going as high as 966.10 and as low as 949.99 in choppy trade.
Volume was very low ahead of the holiday season at just 62.4 percent of the index's 90-day average. After falling for the third straight session on December 8, the index has alternated between rising and falling for seven sessions. The market was also reacting to ratings agency Fitch concluding on Friday that a 'comprehensive solution' to the crisis was technically and politically beyond reach. It warned that six eurozone economies including Italy and Spain could be hit with credit downgrades in the near future.
Strategists said the eurozone crisis and the weak economic backdrop, which may see the eurozone going into recession, was making them more cautious. King said he was avoiding cyclical stocks and "tending to favour things like healthcare, with low valuations and good yields".
The STOXX Europe 600 Healthcare Index rose 0.8 percent. Other defensives to gain included food and drink stocks, with the STOXX Europe 600 Food & Beverage Basic Resources Index up 1.6 percent. Miners lost ground, with the STOXX Europe 600 Basic Resources Index down 0.9 percent. Signs that the property market was cooling in top metals consumer China worsened the outlook for industrial metals demand and weighed on market sentiment.
Comments
Comments are closed for this article.