London: European shares turned positive on Thursday, after demand at a Spanish bond auction held up better than expected, easing some of the worst fears about the euro zone debt crisis, even though yields were high.
At 3:36pm, the FTSEurofirst 300 index of top European shares was up 0.2% at 983.46 points, having been as low as 974.16 earlier.
The market had earlier pulled off its intraday low after European Central Bank President Mario Draghi said it was willing to take further action to prop up the euro zone, even though he said downside risks had grown.
Spain’s Treasury sold €3.75 billion ($5.05 billion) of three bonds on Thursday, right at the top of the targeted 2.75-3.75 billion euro range.
European shares slipped in early trade, giving back a little of the strong gains in the previous session and as the market seeks further guidance from policymakers about their plans to help end the region’s debt crisis.
At 2:36pm, the FTSEurofirst 300 index of top European shares was down 0.3% at 978.77 points, after rising 3.6% in the previous session, when central banks acted jointly to provide cheaper dollar liquidity to starved European banks and China reduced the reserve rate requirement for commercial lenders.
“There’s relief with the coordinated bank action, but people are now asking why have they done it. You can trade into it, but you will probably sell out of it,” said Justin Urquhart Stewart, director at Seven Investment Management.
“That sort of enthusiasm just shows how much pent-up frustration there is. There’s a huge amount of value there, if you’re a bit more confident. But we would also have to see a follow-through (action on the euro zone debt crisis) at the EU meeting next week.”