Europe’s stock markets held mostly steady yesterday as tensions eased over Catalonia and Wall Street drifted after its latest record-busting performance.
Frankfurt briefly made it above the key 13,000 point mark on the DAX index for the first time in a market lifted by Lufthansa shares rising strongly after the carrier said it would swallow up the lion’s share of failed Air Berlin.
“Favourable market conditions, relief on the back of a reduced threat of Catalonian secession from Spain and record low interest rates and QE combined have all helped to lift the German DAX to a new record level of 13,000 today,” said Fawad Razaqzada, a market analyst at Forex.com.
London also pushed moderately higher, helped along by weakness in the pound which boosts earnings of exporters in the FTSE index.
But shares in HSBC slipped after the British banking giant announced it had promoted head of its retail operations John Flint to the post of chief executive.
Madrid investors, meanwhile, took profits a day after a relief rally to push the Ibex a touch lower in closing trade.
Spanish shares had surged Wednesday after Catalan leader Carles Puigdemont called for independence to be suspended to allow for talks with the Spanish government.
The euro conceded ground to the dollar.
“European equity markets are mixed in afternoon action, with global economic optimism continuing and appearing to overshadow elevated expectations of another rate hike in December out of the US,” analysts at the Charles Schwab brokerage said.
London’s FTSE 100 closed 0.3% up at 7,556.24 points, Frankfurt’s DAX 30 ended 0.1% up at 12,982.89 points, Paris’ CAC 40 was 0.03% down at 5,360.81 points, Madrid’s IBEX 35 fell 0.1% at 10,270.60 points and the EURO STOXX 50 finished the day 0.1% down at 3,605.54 points yesterday.
US central bankers are sharply divided over whether to increase interest rates again this year amid persistently weak inflation, but some would prefer a hike, according to minutes released on Wednesday.
The US stock market has enjoyed a record-breaking bull run since March 2009 on the back of ultra-low Federal Reserve interest rates.
The bumper stock gains have continued this year despite two Fed rate hikes — and the increasing prospect of another one in December.
The oil price fell after the International Energy Agency warned that more output restraint is needed from producer countries if the market is to find a sustainable balance.
Both major oil contracts, Brent and WTI, were down by well 1.5% or more by the end of the European trading day, with news of falling weekly US oil stocks doing little to lift sentiment.
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