European stocks slipped early Thursday morning as concerns spooked the U.S. Federal Reserve which could reduce its stimulus programme if the U.S. economy show signs of improvement compounded by the weak economic data from China.
The FTSEuro first 300 fell 20.75 points at 1,235.53 extending at its highest since 2008 in the previous sessions according to Fed Chairman Ben S. Bernanke statement from the testimony to joint Committee of Congress.
Investors raise concerns as to if the economic support in the U.S is withdrawn before Europe manages to maintain a stable growth, which may potentially send the economy into recession.
Lloyds Banking Group Plc dropped 3.6 percent along with a plan to auction $8.7 billion of U.S. mortgage securities.
In the minutes released , Ian Shepherdson chief economist at Pantheon Macroeconomic Advisors said “largely superseded” by Mr Bernanke’s testimony “but they do reinforce the idea that the doves – who are the ones making policy – will need a great deal of persuading to change their stance”.
Mr Bernanke stated in his testimony, that unemployment had dropped to a four year low of 7.5% and that inflation was running below the Fed’s long-term target of 2%.
According to the HSBC’s preliminary survey of purchasing managers, China’s factory activity decreased for the first time in seven months in May.
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