Wednesday, May 29, 2013

Reuters: Most Read Articles: Shares, German bonds fall as Fed stimulus back in focus

Reuters: Most Read Articles
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Shares, German bonds fall as Fed stimulus back in focus
May 29th 2013, 07:33

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A man walks through the lobby of the London Stock Exchange August 5, 2011. REUTERS/Suzanne Plunkett

1 of 8. A man walks through the lobby of the London Stock Exchange August 5, 2011.

Credit: Reuters/Suzanne Plunkett

By Richard Hubbard

LONDON | Wed May 29, 2013 3:33am EDT

LONDON (Reuters) - European stocks and German bond prices fell on Wednesday as robust U.S. economic data fanned speculation the Federal Reserve may taper its bond-buying program.

But analysts said the weakness in equity markets could prove short-lived as the growth momentum implied by Tuesday's figures for home prices and consumer confidence encouraged investors to focus on the better returns shares offer over bonds.

"We still see the rally continuing as the U.S. economy is getting stronger, monetary policies will remain supportive and there are not a lot of alternatives for equities," Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets.

The FTSE Eurofirst 300 index .FTEU3 of top European shares was down 0.5 percent in early trading, following on from a weaker session across Asia which saw MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS fall 0.2 percent.

A rise in the Japan's Nikkei index, which inched up 0.1 percent .N225, lent support to the yen which gained 0.3 percent to 102.14 against the dollar,

German Bund futures were 43 ticks lower at 143.39, with traders looking ahead to unemployment and inflation data out of Germany, and policy recommendations from the European Commission expected to confirm a shift away from tough austerity targets to supporting growth across the recession-hit region.

(Additional reporting by Blaise Robinson; Editing by John Stonestreet)

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