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 The pan-European FTSEurofirst 300 share index fell 0.2 percent to
1601.50 points, still close to last week's 7 1/2-year high. German
business morale, as measured by the Ifo index, rose for the fifth
successive month to its highest since July 2014.
"The macro newsflow in Europe is quite positive, but after such a
rally the market needs to catch its breath. At this point a pause is
needed, while the medium-term trend remains very positive," IG
France chief market analyst Alexandre Baradez said.
French luxury goods maker Hermes <HRMS.PA> was among the biggest
losers, down 1.7 percent, after it reported a 7 percent rise in
full-year operating profit but said foreign exchange rates cut its
margin.
Earlier, Asian shares stalled. MSCI's main gauge of Asia-Pacific
stocks outside Japan edged up 0.1 percent.
Tokyo's Nikkei index rose 0.2 percent to 19,746.20 points,
just below a 15-year high closing level of 19,754.36 hit on Monday.
Chinese stocks fell, breaking an 11-day winning streak as banks
dragged major indexes lower. The CSI300 index of the
largest listed companies in Shanghai and Shenzhen fell 0.8 percent.
The euro rose 0.2 percent to $1.0945, heading back towards
Tuesday's peak of $1.1029 reached on upbeat euro zone data.
The dollar index, which measures the U.S. currency against a basket
of its peers, slipped 0.2 percent to 97.041 but stayed above
Tuesday's two-week low of 96.378.
The index has fallen about 4 percent from a near 12-year high hit in
mid March since the Federal Reserve took a dovish tone on when it
might raise interest rates, prompting many analysts to push back
expectations of the first Fed hike since 2006 to September from
June. The yen was steady at 119.64 to the dollar.
In fixed income markets, German 10-year government bond yields fell
2.3 basis points to 0.215 percent.
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Brent crude oil held steady at $55.14 a barrel, having fallen
earlier on mounting evidence that China's strategic oil reserves may
be nearly full and with U.S. investors also ballooning.
CHINA RESERVES
China has been taking advantage of cheap oil to build up its
reserves, but a senior Chinese oil trading executive said on
Wednesday existing capacity was reaching its limits.
"Although the market should already have expected that the demand
from China's (reserves) would not last forever, it is hard to
predict when this time would come. So now that it has happened, the
markets are just factoring this in," said Daniel Ang, investment
analyst at Singapore-based brokerage Phillip Futures.
Gold slipped but kept close to a 2 1/2-week high on the growing
expectation the Fed will not raise rates until September. Spot gold
was last at $1,192.30 an ounce.
(Additional reporting by Blaise Robinson in Paris, Shinichi Saoshiro
in Tokyo and Henning Gloystein in Singapore; Editing by Andrew
Heavens)
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