European shares lower

European shares ended lower on Friday after a fresh tightening in Chinese monetary policy hit investor risk appetite, although more positive US economic and earnings data had helped pare losses by the close. The FTSEurofirst 300 index ended down 0.1 percent at 1,156.13 points, having been as low as 1,145.05, but remained up 1 percent on the week thanks in large part to Wednesday's surge to a 28-month high.
Miners were among the worst hit after China raised its bank reserve requirements for the seventh time since early 2010 in its attempts to tame inflation, fuelling fears growth would be crimped and encouraging some investors to take profits.
The Europe STOXX 600 Basic Resources index ended down 1.6 percent, with Anglo American and Antofagasta among the worst hit, down 3.2 percent and 2.4 percent respectively. "There's been good and bad economic news this week," said Philip Isherwood, head of equity strategy at Evolution Securities, "but we still believe the economic story is one of a developing strength".
The start to the earnings season had been reasonable, he added, and, coupled with improving macroeconomic data, should provide the tone for market direction in the short term. "I fully admit inflation worries are there in emerging markets, such as China, and there are concerns over the eurozone periphery, but my own view is that the cycle will be driven by the positive message from the corporate sector," he added.
Forecast-beating earnings from US investment bank J.P. Morgan Chase & Co buoyed expectations for results elsewhere in the sector, and helped the Europe STOXX 600 Banking index end up 0.5 percent. Among European banks, Credit Suisse closed up 1.7 percent, while Barclays gained 1.6 percent.
A modest rise in US retail sales, and signs inflation was under control, added to the late afternoon improvement in European market sentiment, traders said. Technical chartists Paris-based Trading Central also backed further gains for the blue-chip ESTOXX 50 index of leading European shares, with target prices of 2,956 points and 3,100, against Friday's close of 2,920.40.
A bullish continuation pattern has been confirmed, said analyst Philippe Delabarre, and momentum was supported by widening Bollinger bands and an ascending trendline. Tech stocks were among the biggest gainers in a well-traded day that saw the broader market trade at 138 percent of its 90-day average, boosted by strong numbers overnight from US and sector heavyweight Intel Corp.
ARM Holdings led gainers in Britain on the back of the news, rising 5.3 percent, while Dutch-based ASML was up 6.4 percent against a 0.6 percent gain in the wider Europe STOXX 600 Technology index. Sanofi-Aventis slipped 1.2 percent following a report that two patients suffered liver failure after taking the company's heart drug Multaq. The company later confirmed two cases of acute liver failure requiring transplants in patients treated with Multaq. Across Europe, the FTSE 100 index ended down 0.4 percent, Germany's DAX closed flat and France's CAC 40 ended up 0.2 percent.