European shares flat in early trade
European shares traded flat today, steadying after weakness in the previous session, as investors speculated over the likelihood of a new round of stimulus from the US Federal Reserve.
The FTSEurofirst 300 was flat at 1,089.45 by 0706 GMT, having shed 0.6 per cent yesterday as mounting concern over the outlook for the global economy prompted investors to lock in profits after strong recent gains.
After chalking up 11 consecutive weekly gains, the index is down nearly 2 per cent so far this week.
Yesterday, Federal Reserve Bank of St Louis president James Bullard, a non-voting member of the Fed, said that US data has been somewhat better since early this month and the minutes from Fed's latest policy meeting were "a bit stale", referring to discussions that indicated a third round of quantitative easing was in the cards.
Hours later, however, Chicago Fed president Charles Evans told CNBC in Hong Kong the Fed should take action to bring down unemployment, including by buying more bonds.
"Fed QE is a bit of an each way bet at the moment... But you've got to bear in mind that the rally that we've seen is on expectations of further QE, so I think it's already priced in," Michael Hewson, senior market analyst at CMC Markets, said.