European stock markets fall before US Fed clues

GMT 11:46 2014 Wednesday ,09 July

Arab Today, arab today European stock markets fall before US Fed clues

European stock
London - AFP

European stock market fell further Wednesday after two days of losses and awaiting minutes of the Federal Reserve's last policy meeting for clues on the outlook for US interest rates.
London's benchmark FTSE 100 index dropped 0.44 percent to stand at 6,708.55 points in midday deals.
Frankfurt's DAX 30 edged down 0.02 percent to 9,770.51 points and the CAC 40 in Paris slipped 0.14 percent to 4,337.23 compared with Tuesday's close.
"European markets remain cautious... amid fears that equities have risen too far, too fast to justify their current valuations and that US interest rates will rise sooner than expected," said Rebecca O'Keeffe, head of investment at stockbroker Interactive Investor.
"Investors will be hoping that June's Fed minutes, released later today, will provide some clarity and reassurance that (Federal Reserve chief Janet) Yellen can continue to hold sway over her more hawkish colleagues.
"However if the strong (US) employment data we have seen over the past week continues, that may not last."
On foreign exchange markets Wednesday, the European single currency eased to $1.3610 from $1.3611 late on Tuesday in New York.
The euro rose to 79.56 pence from 79.45 pence. The pound fell to $1.7106 from $1.7129 the day before.
On the London Bullion Market, the price of gold climbed to $1,323 an ounce from $1,313 on Tuesday.
In London, the Bank of England began its latest monthly meeting on Wednesday. The BoE is on Thursday expected to conclude the gathering by voting in favour of keeping its main interest rate at a record-low level of 0.50 percent.
"Markets are assuming that the Bank of England will resist a tightening of monetary policy," said Neil MacKinnon, economist at VTB Capital financial group.
"However, it is just a matter of time, in our view, before the BoE increases interest rates" amid Britain's largely solid economic recovery.
Asian stock markets sank on Wednesday, following a negative lead from Wall Street and talk of a possible correction for global equities after their rally over the past few weeks.
China released data showing inflation eased slightly in June after hitting a four-month high in May.
US shares retreated on Tuesday for a second straight session after returning from the long, Independence Day weekend. The S&P 500 and Dow had closed last Thursday at record highs after a better-than-expected report on US jobs creation.
But on Tuesday, the Dow slipped 0.69 percent, the S&P 500 fell 0.70 percent and the Nasdaq tumbled 1.35 percent.


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