Shares, German bonds fall as Fed stimulus back in focus

LONDON (Reuters) - European stocks and German bond prices fell on
Wednesday as robust U.S. economic data fanned speculation the Federal
Reserve may taper its bond-buying program.
But analysts said the
weakness in equity markets could prove short-lived as the growth
momentum implied by Tuesday's figures for home prices and consumer
confidence encouraged investors to focus on the better returns shares
offer over bonds.
"We still see the rally continuing as the U.S.
economy is getting stronger, monetary policies will remain supportive
and there are not a lot of alternatives for equities," Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets.
The
FTSE Eurofirst 300 index <.FTEU3> of top European shares was down
0.5 percent in early trading, following on from a weaker session across
Asia which saw MSCI's broadest index of Asia-Pacific shares outside
Japan <.MIAPJ0000PUS> fall 0.2 percent.
A rise in the
Japan's Nikkei index, which inched up 0.1 percent <.N225>, lent
support to the yen which gained 0.3 percent to 102.14 against the
dollar,
German Bund futures were 43 ticks lower at 143.39, with
traders looking ahead to unemployment and inflation data out of Germany,
and policy recommendations from the European Commission expected to
confirm a shift away from tough austerity targets to supporting growth
across the recession-hit region.