European shares take breather

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IOL pic jun6 euro notes Reuters File picture: Lee Jae-Won

London - European stocks paused on Tuesday after a three-day winning streak fuelled by a package of measures from the European Central Bank, with technical charts indicating a key regional index was overbought.

The pan-European FTSEurofirst 300 index was down 0.1 percent at 1,392.02 points at 0726 GMT, with the euro zone's blue-chip Euro STOXX 50 index down 0.2 percent at 3,299.54 points.

Both indexes, which traded at highs not seen since 2008, had risen for three consecutive days after the ECB cut rates and unveiled new stimulus measures on Thursday.

The rise left the Euro STOXX 50 in “overbought” territory based on a smoothed 14-day Relative Strength Index (RSI) - a momentum indicator - for the first time since October, charts showed.

“On a short-term basis, the momentum could slow down,” Philippe Delabarre, an analyst at Trading Central in Paris said. “But this is not going to prevent the continuation of the rise.”

The Euro STOXX 50 has surged 60 percent over the past two years, supported by ECB action and, more recently, tentative signs of recovery in parts of the region.

Among investors taking profit on the rally was US billionaire Wilbur Ross, who said he would sell his 5.5 percent stake in Bank of Ireland three years after his investment, making an estimated profit of over 150 percent.

“The sale... reinforces our view that there remains little in the way of incremental positive catalysts on the horizon for (Bank of Ireland),” analysts at Nomura wrote in a note, cutting their target price for the stock.

Digital security company Gemalto was the top FTSEurofirst riser, up 3.1 percent, as it the said it had been selected by China Telecom as one of the suppliers to support the commercial roll-out of mobile contactless services. - Reuters

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