Stocks in Europe stay in negative territory

European shares came off lows by midday today as the banking sector reversed early losses. Traders also pointed to a 191 million euros refinancing operation by the European Central Bank as a reason for the recovery in the banks.

But they could reportedly be facing more headwinds in future following remarks by European Cenrtral Bank President Jean-Claude Trichet last week that hinted the ECB could raise interest rates further to battle the threat of inflation. One analyst cautioned that problems in the banking sector remain.

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