Europe markets rebound on regional economic data

Visitors pass through the main entrance of the London Stock Exchange. The FTSE 100 index closed up 1.30% at 6,604.89 points yesterday.

AFP/London

Europe’s main stock markets rebounded yesterday as investors reacted to company updates and regional economic data, a day after indices had slid on China slowdown concerns and Ukraine tensions.

Trade was also boosted by talk from the European Central Bank that looser monetary policy could be in the offing.

London’s benchmark FTSE 100 index ended the day up 1.30% at 6,604.89 points in the wake of official data showing a drop in British inflation.

Frankfurt’s DAX 30 jumped 1.63% to 9,338.40 points, with traders shrugging off news of falling German business confidence.

In Paris, the CAC 40 climbed 1.59% to 4,344.12 points.

“Central Bank members have been rather talkative today. It is their talk that has sustained the market,” said Alexandre Baradez, an analyst from IG.

Slovak central bank chief and ECB Governing Council member Josef Makuch said the bank is prepared to combat deflationary risks threatening the recovery in the eurozone.

“Several (ECB) policy makers are ready to adopt nonstandard measures to prevent slipping into a deflationary environment,” Makuch said.

The news was welcomed on the markets, driving up share prices mid-session after a more subdued start to the day.

EasyJet shares advanced 3.68% to 1,692 pence after the British no-frills airline said it expected to report lower losses than thought for its first half-year.

Home improvements group Kingfisher soared 5.98% to 430.8 pence after it said that it would return money to shareholders alongside news of a jump in annual profits.

On the downside, Royal Mail lost 3.17% to 565.5 pence after Britain’s main postal operator said it planned to axe 1,600 jobs under a fresh cost-cutting drive six months after the group was partly privatised.

Wall Street stocks mostly reversed a two-day slide on Tuesday as a US home-price index rose in January for the 24th consecutive month.

In midday trade, the Dow Jones Industrial Average jumped 0.48% to 16,355.50.

The broad-based S&P 500 rose 0.26% to 1,862.28, while the tech-rich Nasdaq Composite Index tacked lower to 0.06% at 4,224.43.

In foreign exchange trading, the euro fell to $1.3806 from $1.3839 late on Monday in New York.

The European single currency dropped to 83.57 British pence from 83.88 pence, while the pound grew to $1.6517 from $1.6498 on Monday.

On the London Bullion Market, the price of gold rose to $1,313.50 an ounce from $1,310.75 on Monday.

“US markets are clearly looking for the next big impetus to push higher or lower and one suspects this will either be a geopolitical event pushing markets down or a surprise boost to US (or Chinese) economic growth pushing markets higher,” said Jasper Lawler, market analyst at CMC Markets.

Britain’s 12-month inflation slowed to 1.7% in February, the lowest level for more than four years, official data showed yesterday.

In January, it had stood at 1.9%, just under the Bank of England’s target rate of 2.0%.

With inflation low and British unemployment not yet below 7.0%, the Bank of England’s Monetary Policy Committee is likely to keep its main interest rate at a record-low level of 0.50% this year, according to economists.

The German Ifo business confidence fell for the first time for five months in March, as the Crimea crisis hurts sentiment in Europe’s biggest economy.

The Ifo economic institute’s closely watched business climate index fell to 110.7 points this month from 111.3 points in February.