European shares trim gains

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Paris - European shares slipped in early trade on Tuesday, giving up some of the previous session's sharp gains that were fuelled by prospects of further stimulus measures from the European Central Bank.

The UK market, shut on Monday for a holiday, gained ground, with the FTSE 100 index up 0.4 percent, led by WPP .

Shares in the global advertising group gained 2.1 percent after it posted first-half profit slightly ahead of forecasts, and confirmed its target.

Antofagasta dropped 2.2 percent after the copper miner posted a fall in first-half core profit, hurt by higher production costs and lower copper prices.

At 10:00 SA time, the FTSEurofirst 300 index of top European shares was flat at 1,366.94 points.

The euro zone's blue-chip Euro STOXX 50 index was down 0.3 percent, at 3,157.33 points, after surging 2.2 percent on Monday, boosted by comments from ECB President Mario Draghi.

“Stocks are taking a breather following yesterday's acceleration. The mood remains quite positive after Draghi's comments which confirmed that the ECB is determined to fight deflation,” Saxo Bank trader Pierre Martin said.

Speaking on Friday at a global central banking conference in Jackson Hole, Wyoming, Draghi said the central was prepared to respond with all its “available” tools should inflation drop further.

The remarks - which have sent the euro to a one-year low against the dollar - have been fuelling speculation the ECB could embark on a large-scale asset-buying scheme known as quantitative easing, or QE, to pump cash into the financial system and revive inflation.

European stocks have surged since mid-2012, with the FTSEurofirst 300 gaining 45 percent, a rally that was sparked by comments from Draghi saying the ECB would do whatever it takes to save the euro.

The rally lost steam in June, however, as investors worried about the impact from the crisis in Ukraine and sanctions against Russia, and after a batch of strong US macro economic data fuelled speculation the Federal Reserve could raise interest rates sooner than expected. - Reuters


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