AFP
European stock markets clawed back some ground yesterday despite weak eurozone data as the Bank of England hinted that a widely anticipated rate rise might be put on hold.
London’s benchmark FTSE 100 index gained 0.37% to close at 6,656.68 points.
Investors mulled news of a drop in British unemployment amid weak wages growth, which pushed back expectations that BoE interest rates could climb before the end of the year.
That in turn pushed sterling lower against the euro and dollar.
“A significant cut to the Bank of England’s wage growth forecast saw sterling crash to a more than two month low against the US dollar, as traders took the revision to mean that the central bank won’t hike rates this year, pushing back some forecasts to the start of 2015,” said Craig Erlam, market analyst at Alpari traders.
Over in the eurozone, Frankfurt’s DAX 30 jumped 1.43% to 9,198.88 points on bargain-hunting a day after the index had lost more than one per cent.
The CAC 40 in Paris advanced 0.78% to 4,194.79 points.
European stocks gained even though eurozone industrial production data showed an unexpected one-month drop.
“Despite June’s unexpected weakness, industrial production in the second quarter overall was flat ... thanks to an upward revision to April’s data,” noted Jessica Hinds, European economist at the Capital Economics research group.
US shares also rose in New York, despite a lacklustre US retail sales report and some disappointing earnings announcements.
In midday trading, the Dow Jones Industrial Average showed a gain of 0.58% to 16,656.70 points, the broader S&P 500 was up by 0.70% at 1,947.19, and the tech-heavy Nasdaq added 0.95% to 4,431.05.
Asian stock markets had mixed results earlier in the day as downbeat data from China and Japan sparked renewed concerns for growth in the region’s two biggest economies.
Japan’s economy shrank by 1.7% in the April-June quarter, official figures showed, while in China industrial output and retail sales numbers came in slightly slower than the previous month’s data.
In foreign exchange trading, the euro slipped to $1.3363 from $1.3368 late on Tuesday in New York.
The European single currency climbed to 80.05 pence from 79.51 pence on Tuesday however, while the pound plummeted to $1.6686 from $1.6811.
On the London Bullion Market, the price of gold fell to $1,312 an ounce from $1,315.75 on Tuesday.
In corporate news, E.ON held to its full-year forecasts despite a slump in profits in the second quarter and first half for Germany’s biggest power supplier.
The group, whose share price leapt by 4.79% to €13.79, also voiced confidence that Russia would not raise energy prices in Europe.
Against the backdrop of the Ukraine crisis, the European Union and the US imposed economic sanctions against Russia at the end of July and Moscow responded by threatening to raise energy prices for European customers.
