European shares ease on growth, euro zone woes

European shares fell on Wednesday after profit warnings from U.S. companies compounded fears the sluggish global economy will erode earnings, while skepticism over the euro zone's ability to tackle its debt crisis pressured other risk assets.

The euro wallowed around two-year lows against the dollar at $1.2260 although industrial commodities and oil regained their footing after sharp falls on Tuesday.

"Risk appetite remains fragile as U.S. earnings worries and various unanswered questions in Europe weigh on sentiment," analysts at Credit Agricole said in a note to clients.

The FTSEurofirst 300 index .FTEU3 of top European companies reversed its previous day's gains to be down 0.4 percent at 1,034.55 points after falls on Wall Street overnight.

German bonds were steady ahead of a 5 billion euro, 10-year debt auction which should see good demand after the latest meeting of euro area finance chiefs did little to ease concerns about the region's three-year debt crisis.

Debt markets were also unnerved by Italy admission that it may want to tap euro zone aid to ease borrowing costs. Investors are also waiting for details of new Spanish austerity measures, due later as part of a deal to gain an extra year to meet deficit targets.

Author : DAIGV with 4 years experience in financial markets

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