A dovish statement from the ECB yesterday helped European stocks while investors largely shrugged off comments that the US and China are far from a deal to resolve their trade dispute.
European markets started the day off on the downside after surveys showed eurozone business growth is at its lowest level in five-and-a-half years.
The surveys reinforced mounting concern about the economy, as markets fret over Brexit, slowing Chinese growth and the fallout from US-led global trade tensions.
While the European Central Bank, as expected, held its interest rates steady, it also indicated it had the tools to deal with a slowdown in growth.
“Healthy earnings reports and an arguably dovish ECB have helped markets recover from morning losses, shrugging off comments by the US commerce secretary, who poured cold water on the idea of a near-term resolution to the US-China stand-off,” said Chris Beauchamp, chief market analyst at online trading firm IG.
The euro slid on the prospect of further ECB measures to aid the economy
In the eurozone, Frankfurt stocks added 0.5 per cent and Paris rose 0.7 per cent. The euro slid on the prospect of further ECB measures to aid the economy.
London stocks finished the day down 0.4 per cent, with Brexit uncertainty continuing to weigh on investors.
US car giant Ford yesterday said a no-deal Brexit could result in the company taking an $800 million hit in 2019 due to new tariffs and a falling pound. And Airbus chief Tom Enders warned the European aerospace giant could make “very harmful decisions” for Britain if it leaves the EU without a deal, and called the government’s handling of Brexit a “disgrace”.
Meanwhile, comments from US Commerce Secretary Wilbur Ross that the US and China are “miles and miles” from resolving their trade war didn’t help investor sentiment, although he also said there is still “a fair chance” of reaching a deal with Beijing.
On Wall Street, a heavy calendar of earnings produced a run of mostly strong results, with American Airlines surging five per cent after projecting stronger-than-expected profits in 2019.
Jobs data also helped reassure investors about the US economy.
New claims for jobless benefits last week sank to the lowest level in nearly 50 years, signalling continued strength of the US labour market.
Nearing midday, US stocks were mixed, with the Dow dipping 0.2 per cent.
Earlier, Asian equities swung to and fro, with few solid catalysts to drive trade.