European equities posted mixed performances yesterday as Chinese data lifted hopes that Beijing would loosen monetary policy further and US trade figures turned out to be better than expected.
London’s benchmark FTSE 100 index of top companies edged up 0.10 per cent to close at 5,851.51 points and the Paris CAC 40 added 0.54 per cent to 3,456.71.
Frankfurt’s DAX 30 slipped by an insignificant 0.02 per cent to 6,964.99 amid disappointing German company earnings.
Madrid’s Ibex 35 index was 0.56 per cent lower at 7,110.2 points meanwhile, and the FTSE MIB slipped by 0.08 per cent to 14,654 points in Milan.
In foreign exchange deals, the European single currency fell to $1.2277 from $1.2363 in New York late Wednesday.
“European markets are trading in a subdued manner, amid light volumes. It seems to be the case that many traders are quite comfortable to stay on the sideline for now,” commented ETX Capital Market analyst Ishaq Siddiqi.
On Wall Street, US stocks traded with little clear direction as well, and the blue-chip Dow Jones Industrial Average was down just 0.04 per cent at 13,170.03 points in mid-day action.
The broader S&P 500-stock index was virtually unchanged at 1,402.22, while the tech-rich Nasdaq added 0.27 per cent to 3,019.35.
Trading drifted despite positive US economic data.
US initial claims for unemployment insurance, an indicator of the pace of layoffs, fell by 6,000 to 361,000 in the week to August 4.
And the nation’s trade deficit for June fell for the third straight month as exports continued to climb while imports decreased.
“Markets might be suffering from fatigue after a rather turbulent first half of 2012 which saw markets posting huge gains in the first three months in order just to give them all back again within the span of six weeks and now they moved up again hugely over the last few weeks close the highs of the year,” Mr Siddiqi suggested.
Earlier yesterday, most Asian stock markets closed higher as data showed China’s growth slowed and inflation hit a two-and-a-half-year low.
That boosted expectations of fresh monetary policy action in the world’s second biggest economy.
China’s consumer price index rose 1.8 per cent year-on-year in July, in line with forecasts but down from 2.2 per cent in June and its slowest pace sinceJanuary 2010.
The figures indicate Beijing – which has cut interest rates twice this year and lowered the amount of cash banks must keep in reserve – has more room to loosen monetary policy.
“Chinese economic data has arguably been the most awaited news,” said GFT analyst Fawad Razaqzada.
“Whether it’s going to be sufficient to see Beijing ease up on its monetary policy is open for debate.”
On the company earnings front, the second biggest German bank, Commerzbank, said it expected net profit in the second half of the year to be lower than in the first, with no end to the eurozone debt crisis in sight.
In reaction, the lender’s share price tumbled 4.21 per cent to €1.23 in Frankfurt.
Commerzbank said its January-June net profit amounted to €644 million, down 36 per cent from a year earlier.
Shares in telecoms giant Deutsche Telekom fell by 1.97 per cent to €9.20 despite the group sticking to its full-year target for stable earnings.
British insurer Aviva saw its share price slip 0.79 per cent to 315.70 pence, after posting a first-half net loss on the back of restructuring costs, adverseforeign exchange movements and bad weather.
The group said it made a loss after taxation of €943 million in the six months to June, compared with a net profit of £125 million a year earlier.
The results also reflected lower contributions from Dutch group Delta Lloyd, in which it sold a 21-per cent stake in July, cutting its shareholding to under 20 per cent.