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| Traders work at the Knight Capital kiosk on the floor of the New York Stock Exchange. Knight Capital Group said yesterday that a “technology issue” in its market-making unit had affected the routing of shares of around 150 stocks to the New York Stock Exchange, where abnormal volatility roiled the markets in early trading |
European stock markets were mixed yesterday and the euro climbed, with all eyes on central bank policy decisions after EU leaders pledged to do everything possible to save the single currency.
Markets were waiting to see if the Federal Reserve would announce fresh stimulus measures aimed at boosting the world’s biggest economy at the conclusion yesterday of the US central bank’s latest monetary policy meeting.
The FTSEurofirst 300 closed up 0.5% at 1,068.20, having traded in a narrow range and in volumes at 69% of the 90-day daily average, with investors holding back as the ECB meeting approaches.
The eurozone’s blue chip Euro Stoxx 50 index was 0.3% firmer at 2,333.38.
The European Central Bank meets in turn today, with expectations high after ECB chief Mario Draghi last week said the Frankfurt-based bank was “ready to do whatever it takes to preserve the euro.”
“I get the feeling from the markets and the way that they have been trading all of this week, since the (Draghi) statement, that ... people are expecting good things,” Derek Hammond, head of institutional equity flows at Societe Generale, said.
“If he now comes and delivers something positive, there is no reason why (investors) would cut their positions in anything ... People will begin to step back into the European markets.”
Lex van Dam, hedge fund manager at Hampstead Capital, which manages $500mn of assets, said: “We all know that the global economy is slowing and that the expectations on central banks are too high, but in the meantime most people are long cash and underweight equities which provides for support every time stocks go down.”
“If the ECB actually comes out and ... confirms what’s already in the markets but indicates that it’s imminent ... I think the markets might initially be disappointed that there wasn’t more of a commitment there, but I think they’d be prepared to hold onto their gain,” Mike Lenhoff, chief strategist at Brewin Dolphin, said.
In afternoon trading, London’s benchmark FTSE 100 index was up 0.93% to 5,687.79 points, Frankfurt’s Dax 30 edged down 0.22% to 6,758.98 points and in Paris the CAC 40 added 0.83% to 3,318.89 points.
Madrid’s Ibex 35 inched up 0.12% and Milan’s FTSE-MIB was flat.
US stocks meanwhile rose at the open getting a boost from a better-than-expected jobs report, with the Dow Jones Industrial Average up 0.40%.
Payrolls company ADP said private-sector employment rose by 163,000 in July, down from a downwardly revised June gain of 172,000 but still well above analyst forecasts.
In foreign exchange deals, the euro rose to $1.2317 from $1.2302 in New York late on Tuesday.
“All eyes will be on the US Federal Reserve ... as they announce their latest interest rate decision with much anticipation from the markets,” said Simon Denham, head of Capital Spreads trading group.
“The rationale behind pumping more money into the system in order to keep the economy growing is simple enough. The US economy is slowing and it’s slowing at a worryingly quick pace.”
In company news, shares in Societe Generale rose 0.36% despite the French banking giant reporting a slump of 42% in the second quarter.
Britain’s Standard Chartered saw its shares jump 5.12% after the Asia-focused bank said its first-half net profit rose 12% to a record high thanks to strong revenue growth.
In Frankfurt, BMW slumped more than 3.0% after the German luxury car maker said its net profits dropped sharply in the second quarter of the year despite strong sales growth in Asia, especially in China.