Nervy traders hurt global shares

European and US stocks fell in afternoon trade, reversing earlier gains as analysts questioned the outlook for US housebuilders.

Earlier Asian markets had climbed strongly, though analysts warned that negative sentiment would prevail.

In New York, the Dow Jones advanced 0.13% to 12,997 but the S&P fell.

The UK's FTSE 100 index slipped 0.4% to 6,237, reversing earlier gains, while Germany and France's key markets declined.

Retail hope

A weak outlook on the prospects for US housebuilders from Citigroup analysts dampened earlier enthusiasm over the health of the global economy.

This had been prompted by a stronger-than-expected start to the Christmas shopping period in the US, which typically begins on the day after the Thanksgiving holiday.

A report by ShopperTrak RCT, a market analysis company, showed that sales gained 8.3% on Black Friday, the day following Thanksgiving.

"A lot of people were expecting the figure to be very weak," said Yasutoshi Nagai of Daiwa Securities SMBC.

"But the data suggests that spending during the Christmas season may be stronger than expected."

Asian markets saw bigger gains with their export-led economies more sensitive to US consumer demand.

"It's not like the fears have gone away, credit markets remain extremely tight and the same worries are still out there"
Edmund Shing, BNP Paribas

Japan's benchmark Nikkei 225 index closed 1.7% higher, while Hong Kong's Hang Seng index ended the day up 4.1% and South Korea's Kospi also roared ahead.

The gains were supported by an appetite for shares in Canon, Sony and Nintendo, with their products expected to be high on Christmas shopping lists this year.

But Edmund Shing at BNP Paribas, in Paris warned that the rally was "fragile".

"In principle, we're in a recovery mode because we have not fully priced in the rally in the U.S. on Friday, and Asian markets were strong overnight," he said.

"[But] it's not like the fears have gone away, credit markets remain extremely tight and the same worries are still out there," the strategist added.