A man uses his mobile phone as he walks past a share prices board outside a securities company in Tokyo yesterday. Japan’s share prices dropped 576.12 points to close at 13,824.94 at the Tokyo Stock Exchange as selling pressure soared due to a stronger yen.
LONDON: European stocks ended the session mixed yesterday with London’s index of leading shares taking the worst of the beating amid more indications that the US Federal Reserve could soon trim back its bond-buying programme.
London’s FTSE 100 index dropped 1.41 percent to close at 6,511.21 points, while Frankfurt’s DAX 30 lost 0.47 percent to end at 8,260.48 points.
“An argument can certainly be made for tapering concerns,” CMC Markets UK analyst Michael Hewson said. “Tapering could well happen later this year; however this certainly hasn’t been reflected in the currency markets where the US dollar has been quite weak.”
He added, however, that “it seems more likely that there remains no real incentive to buy at current levels when volumes are so thin and markets are near multi week highs.”
In Paris, meanwhile, the CAC 40 finished 0.15 percent higher at 4,038.49 points. The stock market in Milan shut 0.93 percent higher, while in Madrid, the exchange ended up 0.52 percent.
The Bank of England was also in the news after it announced a major policy shift, now targeting both unemployment and inflation.
The new head if BoE Mark Carney said the main interest rate would not be changed from 0.50 percent until the unemployment rate has fallen to seven percent. According to BoE’s own forecasts, such a drop is not expected for three years.
The euro rose to $1.3329 from $1.3304 late in New York on Tuesday. The dollar slid to 96.60 yen from 97.72 yen. Sterling strengthened to 85.93 pence versus the European single currency and was higher against the dollar.
Saxo Banque analyst Andrea Tueni said comments from Federal Reserve officials that sparking jitters the pullback of US stimulus funds could begin later this year had weighed on the markets, with investors “consolidating positions as the economic calendar isn’t very busy.”
Asian stock markets closed lower yesterday, with Tokyo leading regional declines with a four percent plunge.
And US stocks, which last week hit record highs, were also lower in midday trading. The Dow Jones Industrial Average dropped 0.54 percent, the broad-based S&P 500 fell 0.63 percent, while the tech-rich Nasdaq Composite Index declined 0.78 percent.
On the London Bullion Market, the price of gold dipped to $1,282.50 an ounce from $1,280.50 on Tuesday.
On the corporate front, shares in TUI Travel slumped 5.16 percent as traders bet on whether Europe’s biggest tour operator would meet its full-year operating profits target after posting fresh net losses.
In Paris, GDF Suez jumped 2.8 percent to ¤17.11 after Deutsche Bank gave the shares a “buy” recommendation from a former “hold”. Stocks in French investment bank Natixis fell 3.8 percent to ¤3.79 despite reporting a lift in second-quarter net profits.
AFP
