European shares edge up after sharp sell-off

London: European shares edged higher on Tuesday, halting a sharp three-session sell-off, although traders and investors said any rally was likely to be short-lived due to persistent worries over Europe’s debt crisis.

The FTSEurofirst 300 index was up 0.2% at 987.93 points, recovering slightly after suffering its biggest one-day fall in more than three weeks on Monday.

Credit rating agency Moody’s downgraded the long-term debt and deposit ratings for 28 Spanish banks late on Monday and Cyprus said it was applying to Brussels for a bailout.

Central Markets senior broker Joe Neighbour said many investors had already anticipated the downgrade of the Spanish banks and the Cyprus bailout, but added that the near-term outlook for European equities markets remained bearish.

“I personally expect that we’ll see a little bit of a pause in the selling but I don’t think it will last. There’s still too much uncertainty out there,” said Neighbour.

“All the European markets are looking a little bit oversold, but we would still be looking to sell into any strength,” he added.