European shares wavered yesterday after losses in Asia, as investors remained cautious on the eve of a highly anticipated policy meeting at the European Central Bank.
London’s FTSE 100 index of top companies dipped 0.20 per cent at close to 5,643.71 points while in Frankfurt the DAX 30 won 0.46 per cent to 6,964.69 points and in Paris the CAC 40 rose by 0.20 per cent to 3,405.79 points.
Madrid added 0.41 per cent and Milan edged up 0.13 per cent.
US stocks also wobbled in early trade yesterday amid hopes that increasingly weak global economic data will spur central banks into action.
The Dow Jones Industrial Average was up 0.32 per cent in midday trade, the S&P 500-stock index edged up 0.13 per cent, while the tech-rich Nasdaq gained 0.11 per cent.
In foreign exchange activity, the euro shot up to $1.2605, compared with $1.2564 late in New York on Tuesday on prospects the ECB would soon intervene on the bond markets.
Asian markets retreated yesterday after a third straight monthly contraction in US manufacturing activity, which followed recent poor numbers on factory activity from Asia and Europe.
Dealers meanwhile were looking ahead to today’s European Central Bank meeting, with all eyes on president Mario Draghi for new measures to fight the stubborn debt crisis.
Market movement came “as persistent global economic growth concerns are being met with optimism that the European Central Bank is about to embark on the resumption of its bond purchase programme,” Charles Schwab & Co. analysts said.
Dealers have been broadly upbeat since Mr Draghi in July hinted at a restart of its sovereign bond-buying programme to help under-pressure eurozone nations suffering high borrowing costs.
And expectations were stoked on Monday after European lawmakers said Mr Draghi had told them buying government bonds of up to three-year maturity on the secondary market did not amount to bailing out spendthrift members.
Such a move in the past was justified to help stabilise and protect the 17-nation eurozone, he said, according to the politicians.
“There have been a number of stories circulating that Mario Draghi will announce a bond-buying programme which will target the debt of troubled countries with maturities of three years and below,” said analyst David Morrison at trading group GFT.
In Asian stock market deals, Hong Kong closed down 1.47 per cent, Tokyo sank 1.09 per cent and Seoul slipped 1.74 per cent, while Shanghai was off 0.29 percent.