Weak German retail sales dent European equities

LONDON, July 31:  European shares edged lower on Wednesday as a fall in German retail sales dented sentiment, while investors stayed away from adding on big equity positions ahead of a U.S. Federal Reserve meeting later in the day.
The pan-European FTSEurofirst 300 index was down by 0.3 percent at 1,202.44 points by 0705 GMT, while the euro zone’s blue-chip Euro STOXX 50 index also fell 0.4 percent to 2,749.01 points.
Germany’s DAX equity index fell 0.4 percent to 8,234.69 points, which traders attributed to investors selling the market after data showed that German retail sales had fallen 1.5 percent on the month in June in their biggest drop this year.
Hendrik Klein, head of high-frequency trading and asset management firm Da Vinci Invest AG, backed selling the DAX at current levels as he felt it could fall down to 8,000 points.
‘The market rally is losing steam,’ he said.
Others were more positive on a longer-term view, saying  the U.S. Federal Reserve – which finishes a meeting later on Wednesday – would not stop its economic stimulus programme of ‘quantitative easing’ too abruptly.
‘While the actions of the Fed remain data dependant,  there is a feeling amongst many forecasters that the U.S. Recovery will not be clean and there will be fluctuations to the data along the way,’ said Central Markets chief strategist Richard Perry.
‘This is likely to discourage the Federal Open Market Committee from exiting its quantitative easing programme too early. Therefore, expect stock markets to continue to push higher for now,’ he added.
(AGENCIES)

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