European stock markets closed slightly lower yesterday, with investors consolidating recent gains ahead of quarterly corporate results while the euro eased as Portugal prepared for debt rescue talks.
Dealers said gold hit a fresh record high above $1,478 as investors bet on further gains for the safehaven metal, helped by a weaker dollar.
The euro continued to benefit from the European Central Bank’s first interest rate hike in nearly three years last week and if profit-taking trimmed its gains, it remained well above $1.44 and near January 2010 highs.
In late yesterday trade, the euro was at $1.4460, down from $1.4484 late Friday, with the dollar at 84.61 yen after 84.80 yen.
Gold closed at $1,468 an ounce, down from $1,469.50 on Friday and the record $1.4718 hit earlier in the day.
In London, the FTSE 100 index of leading shares closed down just 0.04 per cent to 6,053.44 points. In Paris, the CAC 40 shed 0.57 per cent to 4,038.70 points and in Frankfurt the DAX was off 0.17 per cent to 7,204.86 points.
Other European markets posted similar modest losses.
In London, the banks were in focus after a government commission recommended reforms to prevent the need for any more state bailout, chief among them separating retail from investment banking.
The Independent Commission on Banking also proposed raising capital ratios but stopped short of more radical proposals that some had feared would cost the banks huge amounts of fresh capital.
“Overall, the interim report is positive for the banks, with a significant realisation of the potential costs to the economy from radical reforms,” said broker Killik & Co in a note.
“Rumours of a recommendation to break up Britain’s largest banks did not materialise,” noted CurrenciesDirect analyst Alistair Cotton.
Barclays gained 2.76 per cent while bailed out Royal Bank of Scotland put on 2.30 per cent.
In Paris, Aurelien Hotton at Swiss Life Gestion Privee said there was little new to go on as investors waited for the start of the US corporate quarterly reporting season to confirm hopes for a strong US economic pick-up.
“Beyond the results figures, investors are going to be looking closely at what the companies say about the 2011 outlook, especially how they plan to cope with higher raw material prices and the impact Japan’s earthquake (last month) could have,” Mr Hotton added.
In New York, stocks were narrowly mixed in early trade ahead of the first quarter results, with aluminium giant Alcoa kicking things off after the close of trade.
The blue-chip Dow Jones Industrial Average was up 0.46 per cent at around 1600 GMT with the tech-rich Nasdaq Composite down 0.07 per cent.
“Now it’s time for the corporate sector to regain the spotlight,” said Kimberly DuBord at Briefing.com. “In our view, it’s the bright corporate picture that is the most critical to an investor’s outlook.”
In Asian trade earlier yesterday, stocks were mostly lower. Tokyo fell 0.50 per cent, Hong Kong slipped 0.38 percent, Shanghai was off 0.24 per cent but Sydney rose 0.62 per cent.