European share rally stalls ahead of ECB
* FTSEurofirst 300 down 0.5 pct, Euro STOXX 50 down 0.3 pct
* Drop in inflation fuels expectation of ECB action
* Risks seen on the downside if no new ECB measures unveiled
By Blaise Robinson
PARIS, June 3 (Reuters) - European shares slipped on Tuesday in thin volumes, with a number of benchmark indexes retreating from multi-year highs as investors awaited Thursday's European Central Bank meeting before chasing stocks higher.
Expectations of fresh measures by the central bank to support the region's fragile economic recovery and avoid deflation were cemented on Tuesday after data showed euro zone inflation fell unexpectedly in May.
Sources told Reuters last month that the central bank was preparing a package of policy options, including cuts in all its interest rates and targeted measures aimed at boosting lending to small and mid-sized firms.
"Stocks are buoyed by hopes to see the ECB unveil new measures, conventional and unconventional," said David Thebault, head of quantitative sales trading, at Global Equities.
"(ECB President Mario) Draghi has been very credible so far, but with stock indexes at such levels, if he fails to deliver this week, the disappointment could spark a real pull-back." Continuación...