Debt crisis: European shares’ sharp rally runs out of steam
EUROPEAN shares edged lower on Tuesday, with the market's steep three-day rally running out of steam as investors waited to see whether European policymakers would back up pledges to support the euro zone with concrete steps.
Expectations for action from the European Central Bank to tackle the debt crisis were triggered by its president Mario Draghi who said last week that the bank would do whatever it takes to preserve the euro, a message echoed by German Chancellor Angela Merkel and French President Francois Hollande.
Some investors however were sceptical, seeing plenty of scope for market disappointment if the ECB does not announce bold measures to tackle the crisis after its meeting on Thursday.
"The tactical PR campaign to support the euro zone has bought ministers some time in a typically thin summer market," Mike McCudden, head of derivatives at Interactive Investor, said.
"But actions do indeed speak louder than words and it's only a matter of time before patience runs out."
The FTSEurofirst 300 was down 0.1 percent at 1,071.44 by 0700 GMT, having soared more than 5 percent in the previous three sessions in a rally sparked by Draghi's pledge.