Europe’s stocks ended mixed yesterday, with most main markets buoyed by unexpectedly strong US retail sales data.
In London the FTSE 100 index climbed 0.52 per cent to 5,891.21 points, and in Paris the CAC 40 advanced 0.27 per cent to 3,902.87 points.
Meanwhile in Frankfurt the DAX ended narrowly down with a drop of 0.03 per cent to 7,029.39 points.
On Wall Street stocks rose after the Commerce Department reported that retail sales rose by an unexpectedly strong 0.8 per cent in November, although the market was also looking to the outcome of a meeting of US Federal Reserve policymakers.
The Dow Jones Industrial Average had risen 0.59 per cent to 11,496.26 by midday, while the S&P 500 index, a broader measure of the market, was up 0.40 per cent to 1,245.35.
The tech-rich Nasdaq rose 0.39 per cent to 2,635.23.
“Overall, the November retail sales report was a strong report that flew in the face of the weak wage growth reported in the November employment report,” said Patrick O’Hare at Briefing.com.
Retail and food services sales for November rose 0.8 per cent from the prior month to $378.7 billion, the Commerce Department said.
The increase was much better than the 0.5 per cent rise expected by economists and signaled that Americans were more willing to open their wallets, fuelling consumer spending that makes up two-thirds of US economic activity.
The US Federal Reserve’s Federal Open Market Committee is expected to note a slight improvement in the US economic outlook but stick to its massive $600-billion asset purchasing policy launched last month in a bid to boost the recovery.
“Traders are treading cautiously ahead of the afternoon conclusion of the US Federal Reserve’s monetary policy meeting,” said analysts at Charles Schwab.
The Fed is widely expected to maintain US interest rates at historically-low near-zero levels.
In Europe yesterday, Spain was forced to pay sharply higher rates at a bond auction, with the yield on 12-month bills climbing to 3.449 percent from 2.363 per cent one month ago.
The yield on 18-month bills rose to 3.721 per cent from 2.664 per cent.
Spain has faced higher borrowing costs since Ireland last month agreed to a bailout from the International Monetary Fund and the European Union similar to the one granted Greece in May, prompting the government to announce further measures last week to improve its finances.
Spanish shares fell on the announcement, with the IBEX-35 down 0.58 per cent at one point. It later recovered to close with a gain of 0.11 per cent.
The Italian market rose 0.36 per cent after Prime Minister Silvio Berlusconi survived a no-confidence vote, although by just three votes and it appears he no longer has a stable majority.
Elsewhere in Europe, Amsterdam dipped 0.01 per cent, Brussels slipped 0.04 per cent and Lisbon fell 0.74 per cent. Swiss stocks rose 0.41 per cent.
Asian stocks edged tentatively higher Tuesday as sentiment towards China was capped by uncertainty over Beijing’s plans to rein in inflation.
Hong Kong edged up 0.49 percent to 23,431.19 and Shanghai rose 0.15 per cent to 2,927.08.
Sydney ended up 0.21 per cent at 4,766.9 and Tokyo rose 0.22 per cent to 10,316.77 as dealers gave a muted welcome to government plans to cut corporate tax.
Seoul finished 0.62 per cent higher to reach 2,009.05.