European stocks retreat as traders book profits

European and US stocks slid yesterday as traders booked profits in the absence of key data in a market that generally lacks momentum, analysts said.
London’s benchmark FTSE 100 index closed down 0.15% at 6,858.95 points, while in the eurozone, Frankfurt’s DAX 30 shed 0.5% at 10,544.36 points and the Paris CAC 40 lost 0.8% at 4,400.52 points. Euro Stoxx 50 was down 0.9% at 2,968.80 points.
“In light of an almost empty economic calendar today more of the same trading pattern appears likely...
with the occasional round of profit-taking,” said City of London Markets trader Markus Huber.
Wall Street was trading lower around mid-day in New York with the Dow Jones Industrial Average falling 0.2%.
US and European markets had edged higher on Thursday, with help from a dovish outlook for US interest rates, higher crude prices and some healthy post-Brexit data in Britain, traders said.
The oil price continued its upward trend yesterday, with Brent crude holding above $50 a barrel.
And in foreign exchange, the dollar rose against major rivals, although gains were capped by doubts about the chances of a US interest rate hike occurring this year.
Minutes from the Fed’s July meeting said that policy members wanted to keep “options open” and remained divided on the need for a near-term rate hike.
“It would seem that Federal Reserve officials face a very complex, and possibly divisive, debate over the conundrum of an improving employment sector against a background of low inflation and tepid consumer spending,” Stephen Innes, a senior trader at forex firm OANDA, wrote in a commentary.
Other key Asian markets were mixed, with Shanghai slightly up while Hong Kong slipped 0.2%.
“The market lacks momentum,” Margaret Yang, an analyst at CMC Markets in Singapore, told Bloomberg News.
“The market has been driven by liquidity arising from loose monetary policies by central banks around the world, rather than improving economic fundamentals.
Besides the rally in oil, there’s nothing that could push share prices higher.”
While most Asian markets were cautious, Tokyo’s main stocks index managed to rise as a yen rally petered out, supporting the profitability of exporters such as automakers Toyota and Honda.