European stock markets lose steam; London down 0.2%
July 13 2016 09:15 PM
Traders work at the Frankfurt Stock Exchange. The DAX 30 dipped 0.3% yesterday.


This week’s rally in global equities petered out yesterday, with US stocks flat after having set record highs and Europe’s main indices ending mixed.
In late morning trading on Wall Street, the Dow Jones Industrial Average and the broad-based S&P 500 were essentially flat after both set new closing records the previous day.
An optimistic tone had filled trading floors after US data Friday showed the world’s No 1 economy created far more jobs than expected last month.
At the same time, the rapid appointment of a new prime minister to lead Britain out of the European Union also helped reassure markets.
London’s benchmark FTSE 100 index ended the day down nearly 0.2% as British Prime Minister David Cameron bowed out following Britain’s vote to quit the EU.
Theresa May steps up from her role of interior minister in the Conservative government to take over as premier.
She will have to quickly assemble a team to negotiate Britain’s exit from the EU and secure trade deals with other major economic partners.
In the eurozone, Frankfurt’s DAX 30 dipped 0.3% and the Paris CAC 40 eked out a gain of 0.09%.
“The strong rally that started the week has run out of steam as expectations of stimulus measures were tempered” in China and Japan, said CMC Markets analyst Jasper Lawler.
While many analysts see concerns about Brexit easing, Germany yesterday issued a 10-year bond at negative interest rate for the first time, an indication that many investors are still worried about the future.
The 10-year German government bond or “Bund” is regarded as one of the safest investments and investors often turn to it as a “safe haven” during crises.
It is the first time that investors have accepted negative returns in the first issue of a bond, meaning they will pay for the privilege of owning rock-solid Bunds.
But investor anticipation is building ahead of a Bank of England meeting Thursday that could result in increased support for the British economy.
Markets expect the Bank to cut its main interest rate to a new record-low – below 0.5%.

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