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European Shares Close Lower Ahead of Key Week

CNBC.com
Monday, 10 Sep 2012 | 11:33 AM ET

European shares closed lower on Monday ahead of a week of decisive political events in Europe and the Federal Reserve’s key meeting this week.

  Price   Change %Change
CAC 40
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DAX
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The FTSEurofirst 300 Index provisionally closed down 0.3 percent.

European shares had rallied by over 3 percent last week after the European Central Bank (ECB)announced its much-awaited bond-buying plan.

This week investors may remain on the sidelines as the Fed meets in the U.S. to decide on whether more economic stimulus in the form of quantitative easing (explain this) is needed.

In Europe, investors are looking to Wednesday when the Dutch elections are held, officials from the group of international lenders known as the troika meet in Greece and the German Constitutional Court decides on the legality of the proposed permanent euro zone bailout, the ESM, after 37,000 Germans lodged complaints against the move. The troika have already told the Greek government that its latest budget cuts must be revised.

The European Commission will also detail proposals for a European-wide banking regulator on Wednesday.

Monday's Events

French industrial production for July rose 0.2 percent month-on-month, which was well above forecasts of -0.5 percent.

Italy's gross domestic product was revised down on Monday. Data showed the Italian economy shrank by 0.8 percent in the second quarter of 2012, worse than the first estimate of a 0.7 percent contraction.

Euro zone investor confidence data was better than expected. The Sentix data released showed a rise to -23.2 points in September, from -30.3 points registered in the previous month.

Germany auctioned 3.4 billion euros of six-month debt on Monday morning. Bundesbank data showed it attracted more demand than at a previous sale in August. The bid-to-cover ratio stood at 1.5 and the average yield was -0.015 percent.