|
European stock markets rose yesterday despite plunging Japanese stocks as traders digested US growth data and signs of improved confidence in the eurozone. |
At close, London’s FTSE 100 index of leading shares gained 0.45% to 6,656.99 points. Frankfurt’s Dax 30 index advanced 0.76% to 8,400.2 points, while in Paris the Cac 40 rose 0.56% to 3,996.31 points.
“The significant decline of 5% overnight in Japan have dented sentiment but failed to make any real impact to the downside in European markets.... But this anomaly does beg the question, if not now, when?” said Brenda Kelly, senior market strategist at traders IG.
US stocks also gained in early trade yesterday after two days of losses, as the government’s revised estimate of first-quarter economic growth
came in barely changed at 2.4%.
In midday trade, the Dow Jones Industrial Average was up 0.42%, the broad-based S&P 500 rose 0.58%, while the tech-rich Nasdaq Composite Index gained 0.73%.
In foreign exchange trading yesterday, the euro rose to $1.3041 from $1.2938 late in New York on Wednesday.
The dollar inched up to ¥101.08 from ¥101.06 on Wednesday.
On the London Bullion Market, the price of gold climbed to $1,418.50 an ounce from $1,382.50 on Wednesday.
“The euro has... derived support in the near-term from the stronger than expected rebound in German inflation to 1.5% in May which modestly lowers the probability of another... (ECB) rate cut in June,” said Lee Hardman currency analyst at the Bank of Tokyo-Mitsubishi UFJ in London.
Hardman added that the European single currency should win support also from “a slower pace of fiscal tightening” after the European Commission gave eurozone heavyweights France and Spain extra time to meet their budget deficit targets.
Sentiment was downbeat after the Organisation for Economic Cooperation and Development on Wednesday trimmed its world economic growth forecast for 2013 to 3.1% from 3.4%.
The OECD slashed its growth forecast for the world’s most advanced economies, except Japan, but said growth should pick up later this year.
Meanwhile, optimism about profitability among European companies in China has fallen to an all-time low, a survey showed yesterday, with only 29% saying the outlook was positive in the world’s number two economy.
The statistic in the European Union Chamber of Commerce in China poll of more than 500 of its members was down from 34% last year and the lowest since the first survey in 2004.
This, as consumer and business confidence in the 17-nation eurozone bounced back in May after a sharp drop in April, a European Commission survey showed.