European stock markets closed mostly lower yesterday as investors took profits on recent gains and tried to get a fix on the outlook as political unrest in Egypt and the Middle East prompted caution.
Dealers said a much better-than-expected US new jobless claims report failed to lift sentiment, with Wall Street down on disappointing company guidance but US stocks there picked up later as it became increasingly likely that Egyptian President Hosni Mubarak would step down very soon.
In London, the FTSE 100 index of leading shares closed down 0.53 per cent to 6,020.01 points. In Paris, the CAC 40 edged up 0.11 per cent to 4,095.14 points and in Frankfurt the DAX added 0.26 per cent to 7,340.28 points.
Elsewhere Amsterdam gained 0.39 per cent but Brussels lost 0.64 per cent, Madrid fell 1.31 per cent, Milan dropped 0.38 per cent and Swiss stocks were down 0.30 per cent.
In late London trade, the euro was at $1.3629, down from $1.3727 in New York late Wednesday and the dollar rose to 83.09 yen from 82.35 yen.
The pound firmed to $1.6131 from $1.6097 but fell to €0.8449 from €0.8524.
The US data helped the dollar, picking up sharply against the euro which was also hurt by fresh concerns over the financial health of some of the eurozone’s weaker members.
The Bank of England’s decision to keep interest rates on hold was expected, although analysts said they believed the vote must have been close given concerns over rising inflation.
In New York, the blue-chip Dow Jones Industrial Average was down 0.15 per cent at around 1700 GMT while the tech-heavy Nasdaq Composite was flat, coming off early lows as Egypt’s Mr Mubarak appeared ready to step down after weeks of popular unrest.
Dealers said disappointing guidance from Cisco pushed the shares down more than 13 per cent and hit the broader market too, offsetting news that US new jobless calms tumbled to two-year low last week.
In London, Sean Power, an analyst at traders City Index, said the markets “started the day in negative territory ahead of the Bank of England’s rate decision” as investors adjusted positions.
In Paris, Frederic Rozier at Meeschaert said solid corporate results were positive but the financial stocks were under pressure given the prospects of tighter monetary policy as central banks try to head off inflation.
China’s third rate hike in four months at the weekend continued to weigh on sentiment, with miners – major beneficiaries of the Chinese boom – continuing to slip.
In Asian trade yesterday, Tokyo edged up 0.11 per cent, Sydney gained 0.19 per cent but Shanghai jumped 1.59 per cent, helped after car makers reported strong January sales.
Hong Kong slumped another 1.97 per cent, extending losses after China’s interest rate hike and a general retreat from emerging markets, dealers said.