European stocks mixed, euro climbs ahead of Fed announcement
European stock markets were mixed yesterday and the euro climbed, with all eyes on central bank policy decisions after EU leaders pledged to do everything possible to save the single currency.
Markets were waiting to see if the Federal Reserve would announce fresh stimulus measures aimed at boosting the world’s biggest economy at the conclusion of the US central bank’s latest monetary policy meeting yesterday.
The European Central Bank meets in turn today, with expectations high after ECB chief Mario Draghi last week said the Frankfurt-based bank was “ready to do whatever it takes to preserve the euro.”
In afternoon trading, London’s benchmark FTSE 100 index was up 0.93 per cent to 5,687.79 points, Frankfurt’s DAX 30 edged down 0.22 per cent to 6,758.98 points and in Paris the CAC 40 added 0.83 per cent to 3,318.89 points.
Madrid’s IBEX 35 inched up 0.12 per cent and Milan’s FTSE-MIB was flat.
US stocks, meanwhile, rose at the open getting a boost from a better-than-expected jobs report, with the Dow Jones Industrial Average up 0.40 per cent.
Payrolls company ADP said private-sector employment rose by 163,000 in July, down from a downwardly revised June gain of 172,000 but still well above analyst forecasts.
In foreign exchange deals, the euro rose to $1.2317 from $1.2302 in New York late on Tuesday. “All eyes will be on the US Federal Reserve as they announce their latest interest rate decision with much anticipation from the markets,” said Simon Denham, head of Capital Spreads trading group.
“The rationale behind pumping more money into the system in order to keep the economy growing is simple enough. The US economy is slowing and it’s slowing at a worryingly quick pace.”
In company news, shares in Societe Generale rose 0.36 per cent despite the French banking giant reporting a slump of 42 per cent in the second quarter.
Britain’s Standard Chartered saw its shares jump 5.12 per cent after the Asia-focused bank said its first-half net profit rose 12 per cent to a record high thanks to strong revenue growth.
In Frankfurt, BMW slumped more than 3.0 per cent after the German luxury carmaker said its net profits dropped sharply in the second quarter of the year despite strong sales growth in Asia, especially in China.
Asian stock markets closed mostly down on Wednesday as nervous investors awaited the outcome of the Federal Reserve meeting.
Tokyo fell 0.61 per cent and Sydney was down 0.15 per cent but Shanghai rose 0.94 per cent after data showed China’s manufacturing activity picked up modestly to a three-month high in July.
HSBC bank said its closely watched purchasing managers’ index (PMI) for China, which gauges nationwide manufacturing activity, rose to 49.3 in July compared to 48.2 in the previous month.