August 10, 2012 / 5:50 AM / 6 years ago

Weak China data leads shares, euro lower

LONDON (Reuters) - Poor Chinese trade data clipped a strong recent run by European shares and the euro on Friday, unwinding some of the gains built since the European Central Bank began to ready fresh action to combat the region’s debt woes and limp growth.

Traders are pictured at their desks in front of the DAX board at the Frankfurt stock exchange August 6, 2012. REUTERS/Remote/Tobias Schwarz

The FTSEurofirst 300 index of top European shares .FTEU3 was down 0.35 percent at 1,097 points, but still near levels last seen in March after the European Central Bank had pumped over a trillion euros of cash into the banking system.

Europe’s stock markets began their latest rally two weeks ago when ECB President Mario Draghi said the central bank was “ready to do whatever it takes to preserve the euro”, raising hopes of bold steps to help lower the borrowing costs of Spain and Italy.

The drop in European shares was complemented by greater demand for German government bonds - traditionally favored by risk-averse investors. Bund futures were up 53 ticks at 143.09 from Thursday’s settlement.

“There’s been a bit of risk-off ... and we’re following U.S. Treasuries higher, but agenda-wise things are quiet. We could go sideways till we get into September. There’s no supply next week that might give us some support,” a trader said.

The euro - the key barometer of faith in the euro zone’s ability to overcome its debt problems - was down at $1.228, 1.3 percent off its peak of the week.

Commodity markets took their cue from the Chinese data and the prospects of further central bank action.

Brent crude eased 36 cents or 0.3 percent to $112.86 a barrel, and U.S. crude inched down 0.2 percent to $93.16 a barrel.

Editing by Will Waterman

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