European shares pauseComment on this story
London - European stocks paused for a breather on Friday after brisk gains since the start of July set key regional indexes on course for their biggest weekly gains in several months and close to major technical resistance levels.
Shares in Austria's Erste Group Bank sank by 14 percent after emerging Europe's third-biggest lender warned it will post a record loss this year (FY14) due to fresh hits from Hungary and Romania.
It was the top faller on the pan-European FTSEurofirst 300 index, which was down 0.1 percent at 1,396.63 points at 09:24 SA time. The index was still up 1.8 percent for the week, its biggest weekly gain since March and close to a 6-1/2 year highs.
The euro zone's blue-chip Euro STOXX 50 index, also on track for its best weekly advance since March, was down 0.2 percent at 3,282.77 points.
Strong US economic data and supportive rhetoric from the European Central Bank have fuelled a rally in European equities this week, catching some investors by surprise after a dip in June had led some to believe the rally was losing momentum.
“You can't fight the tape, it's as simple as that,” said Justin Haque, a broker at Hobart Capital Markets, using a market phrase which refers to taking a contrarian position.
“In a very bullish scenario the Euro STOXX is going to make a new high at 3,360.”
Trading activity was thin on Friday, with the US stock market, the world's largest, shut for a national holiday.
Volume on FTSEurofirst 300 was a mere 4 percent of its full-day average for the past three months after the first half-hour of trading, usually one of the busiest times of the day.
Trading activity on Erste's stock, however, was already nearly twice its own average after the bank's profit warning late on Thursday.
“In the short term, another profit warning is not good news,” analysts at Societe Generale wrote in a note, downgrading the stock to “hold” from “buy”.
“Slightly weaker underlying FY14 operating income..., and no obvious catalysts for the remainder of 2014, demand some caution as the market digests this news.” - Reuters