European stocks eke out gains

June 15, 2013 - 3:26:09 am

Traders work at their desks in front of the DAX board at the Frankfurt Stock Exchange yesterday.

LONDON: Europe’s top stock markets managed small gains yesterday as traders began to look ahead to a US Federal Reserve meeting next week that could provide indications for when it may scale down monetary stimulus.

London’s FTSE 100 index of leading shares edged up 0.06 percent to end the day at 6,308.26 points, in Paris the CAC 40 rose 0.19 percent to 3,805.16 points and in Frankfurt the DAX 30 index climbed 0.40 percent to 8,127.96 points. Milan added 0.23 percent but Madrid’s IBEX 35 dipped 0.01 percent as data showed the country’s debt hit a new record. 

European markets had ridden out a bumpy session on Thursday following heavy losses in Tokyo on investor fears of central banks pulling the plug on their extraordinary stimulus measures.

Tokyo’s benchmark Nikkei 225 index rallied 1.94 percent, rebounding from a massive sell-off in the previous session stoked by a surging yen and jitters over an end to central bank stimulus.

Analyst Michael Hewson at CMC Markets UK said the rebound on European markets initially had little steam, but picked up when data showed US consumer confidence dropped in June.  Markets have been on a rollercoaster the past few weeks on the phasing out of the US Federal Reserve’s massive monetary stimulus, known as quantitative easing.

This programme, under which the Fed purchases government and corporate bonds, has freed up funds and has been credited with propping up global equity markets in recent months.

Worries about the scale of the Bank of Japan’s stimulus measures have also sent markets swooning. 

In foreign exchange deals, the European single currency dropped to $1.3344 from $1.3372 late in New York on Thursday. The dollar fell to 94.24 yen from 95.31 yen Thursday.

On the London Bullion Market meanwhile, the price of gold retreated to $1,379.75 an ounce from $1,385 on Thursday.

Traders digested news of a sharp fall in the number of people in work in the eurozone during the first quarter that left employment across the single currency bloc at its lowest level in more than seven years.

Eurostat, the European Union’s statistics agency, said the number of people in work in the 17 nations that use the euro fell 0.5 percent in the first three months of the year compared with the final quarter of 2012 to a seven year low.

Spain’s public debt meanwhile  surged to 88.2 percent of annual economic output, up by 15.2 percentage points from a year earlier, the central bank said.

US stocks sagged, with the Dow Jones Industrial Average down 0.43 percent to 15,110.58 points. The broad-based S&P 500 lost 0.38 percent to 1,630.08, while the tech-rich Nasdaq Composite shed 0.41 percent to 3,431.15. AFP