European shares slide in choppy trade

Markets checked by ongoing worries over euro zone, offsetting signs of pickup in world trade

The euro edged up from a two-week low, while oil and European equities slipped from multi-month highs on Monday, with markets checked by ongoing worries over the euro zone, offsetting signs of a pickup in world trade.

Trading is expected to be light and choppy in the absence of any major economic drivers, a looming meeting of euro area finance ministers and the Lunar New Year holiday shutting most Asian financial centres.

The euro briefly touched a two-week low of $1.3325 in Asian trade, extending a sell-off that saw the common currency shed about 2.5% last week, but it has since steadied to be little changed around at around $1.3370.

Analysts were not expecting much new from a euro zone finance ministers meeting later in the day, though markets will be on watch for any discussion on the strength of the euro ahead of the G20 meeting at the end of the week.

Since hitting a 15-month high of $1.3711 on February 1, sentiment towards the euro has shifted after European Central Bank president Mario Draghi suggested any further strength could result in an interest rate cut. Nervousness over political developments in Spain and Italy has also unsettled the currency.

"The euro has stabilised at lower levels following last week's verbal intervention from ECB President Draghi, which was a subtle attempt to dampen the pace of euro appreciation in the near term," said Lee Hardman, currency analyst at Bank of Tokyo-Mitsubishi UFJ.

The pan-European FTSEurofirst 300 index traded down 0.3% at 1,157.97 points in early trade, having added 1.2% on Friday on data showing a narrowing trade deficit in the United States and growing demand for Chinese exports, which bolstered hopes the global economy would strengthen.

Brent crude prices dipped slightly but remain not far from the nine-month high of just over $119 per barrel hit on Friday as the Chinese trade data revealed a big jump in oil imports.

Brent crude had dipped 40 cents to $118.50 per barrel, having peaked at $119.17 on Friday, the highest since May. US crude futures fell 126 cents to $95.46.

Oil markets could get some support from stormy weather in the heavily populated US Northeast, where a blizzard dumped up to 40 inches (1 metre) of snow with hurricane force winds, leaving hundreds of thousands of people without power.