European markets slip as New Year nears

A broker gestures near the Dax index graph board at the last trading day of the year at the Frankfurt Stock Exchange yesterday. This year, the Dax has soared by almost 26%.

AFPLondonEuropean stock markets slid yesterday, with many investors away for an extended festive break, but Frankfurt hit a new record peak on optimism over the German economic outlook, dealers said. At close, London’s benchmark FTSE 100 index ended down 0.29% at 6,731.27 points and the CAC 40 in Paris dipped 0.05% to 4,275.71 points. And on its final trading day of 2013, Frankfurt’s DAX 30 dropped 0.39% to a close of 9,552.16 points, after hitting a new historic high at 9,594.35 points. With the closing level, Frankfurt will have risen an astonishing 25.5% in a year marked by a series of new record highs, having started the year at 7,612.39 points. The British and French markets will remain open today for a half-day, before a holiday shutdown across Europe tomorrow for New Year’s Day. “Trading volumes are expected to remain low for most of this week, if not all of it, with another bank holiday coming on Wednesday,” said analyst Craig Erlam at traders Alpari. Despite subdued deals, all three main European equity markets have scored impressive gains in 2013, propelled by growing confidence over the global economy and low interest rates, dealers said. This year, Frankfurt has soared by almost 26%, while Paris has gained 17% and London 14%, aided also by signs that the US economy—the world’s biggest—was on the road to recovery. “At the end of the year, markets seem to be in rally mood, even if the mood is a bit subdued,” Varengold Bank analyst Anita Paluch told AFP. “It’s been a year of ultra-easy money that helped to spur the performance in so many markets, a period that is slowly coming to an end.” She added: “It’s been a very good year for the DAX. With the global outlook improving, still-low interest rates and weak euro, the landscape looks positive for German firms.” US stocks Monday moved mostly lower in midday trade as investors looked ahead to a smattering of economic reports in the shortened week. The Dow Jones Industrial Average advanced 0.04% to 16,485.32. The broad-based S&P 500 slipped 0.06% to 1,840.23, while the tech-rich Nasdaq Composite Index declined 0.08% to 4,153.18. The European single currency rose to $1.3816 from $1.3743 late in New York on Friday. The euro rose to 83.62 pence, while the British pound gained to $1.6521. Sterling had soared on Friday to $1.6578 - which was the highest level since mid-August 2011. The pound had rallied late last week after research group the Centre for Economics and Business Research (CEBR) predicted that the British economy would surpass France and Germany to become Europe’s biggest economy by 2030. Gold slid to $1,204.50 an ounce on the London Bullion Market on Monday, from $1,214.50 on Friday. Last week meanwhile, investors broadly welcomed the US Federal Reserve’s recent decision to reduce its bond-buying by a modest $10bn a month to $75bn while pledging to keep interest rates at record lows for the foreseeable future.