European shares edge lower, focus on U.S. data

* FTSEurofirst 300 down 0.2 pct after strong gains on Wed

* Investors await U.S. economic data

* For up-to-the minute market news, click on [STXNEWS/EU]

By Atul Prakash

LONDON, Sept 2 (BestGrowthStock) – European equities edged lower on
Thursday after the previous session’s jump, though auto shares
were buoyed by sales data in a market mostly holding its fire
ahead of more U.S. economic data due later in the day.

By 1155 GMT, the FTSEurofirst 300 (.FTEU3: ) index of top
European shares was down 0.2 percent at 1,054.10 points after
surging 2.9 percent on Wednesday, their biggest gain since May,
on upbeat manufacturing data from China and the United States.

The market showed little reaction to Thursday’s decision by
the European Central Bank to keep interest rates on hold at a
record low, as expected, amid tepid economic recovery and
persistent concerns about the banking sector. [ID:nLDE68114V]

Analysts expect the euro zone central bank to extend its
liquidity safety net to banks, offering unlimited funding until
early next year at fixed interest rates.

ECB President Jean-Claude Trichet will announce the decision
on liquidity supplies at a news conference starting at 1230 GMT,
when he will also reveal new staff economic forecasts.

Tammo Greetfeld, equity strategist at UniCredit, said an
extension of the ECB’s liquidity support into the first quarter
of 2011 would be a “double-edged sword”.

“On the one hand, we know that life for banks in the euro
zone will be easier until the date the ECB announces, but on the
other hand it also signals that the interbank money market does
not function properly enough despite the publication of the bank
stress test results.

“My opinion is that this negative aspect would be a dominant
factor,” Greetfeld said.

UTILITIES FALL

Utilities shares were among the top decliners on the index,
with Centrica (CNA.L: ), E.ON (EONGn.DE: ) and Energias de Portugal
(EDP.LS: ) falling 0.1 to 1.8 percent.

But losses were limited by stronger carmakers, with the
STOXX Europe 600 Automobiles & Parts index (.SXAP: ) rising 1
percent. Daimler (DAIGn.DE: ) gained 1.9 percent after saying late
on Wednesday that U.S. sales of Mercedes Benz and Smart brand
vehicles rose 7.4 percent in August.

Porsche (PSHG_p.DE: ) gained 1.2 percent after reporting that
sales of its cars surged 33 percent in the United States during
the month. BMW (BMWG.DE: ), Volkswagen AG (VOWG.DE: ) and Renault
(RENA.PA: ) were up 0.8 percent to 1.3 percent.

Investors are waiting for more U.S. data later in the
session, including weekly jobless numbers and pending home
sales, to give further indications on the strength of the
recovery in the world’s biggest economy.
(Editing by Will Waterman)

European shares edge lower, focus on U.S. data