European stocks recover from ECB disappointment

European shares and the euro staged a slight recovery on Friday from a big selloff provoked by the European Central Bank's failure to satisfy investors' hopes of swift action to tackle the debt crisis.

The market's attention is likely to switch temporarily from central bank policy to the outlook for growth, with July U.S. non-farm payrolls data, due at 1230 GMT, expected to show job creation running at weak levels.

"The European crisis may take a temporary backseat around the U.S. employment release, but it is still the dominant issue facing global markets," Barclays Capital said in a note.

The FTSEurofirst 300 index of top European shares was up 0.1 percent at 1,056.55 points after losing 1.2 percent on Thursday when investors were disappointed by the outcome of the ECB's latest policy meeting.
The ECB kept rates unchanged and dashed hopes of any immediate action to ease the borrowing costs of Spain and Italy by indicating it may resume buying bonds but only under conditions that would delay any move until at least September.

In reaction to the announcement, Spanish 10-year bond yields were up 14.5 basis points on Friday at a crippling 7.37 percent, while equivalent Italian yields had gained 9 basis points to 6.43 percent.

The euro was under pressure but traded around $1.22, up 0.15 percent, having fallen nearly three cents to $1.2133 on disappointment over the ECB's decision.

Copyright Thomson Reuters 2012