European stocks firm amid unease over sanctions

GMT 17:15 2014 Tuesday ,29 July

Arab Today, arab today European stocks firm amid unease over sanctions

Frankfurt stock exchange
London - AFP

Europe's stock markets pushed higher on Tuesday, shrugging off concerns about the impact of harsher EU sanctions against Russia on the back of upbeat earnings.
London's benchmark FTSE 100 index climbed 0.46 percent to stand at 6,819.48 points from Monday's closing level.
In Paris, the CAC 40 increased 0.90 percent to 4,382.64 points and Frankfurt's DAX 30 index added 0.58 percent to 9,653.65.
But investors remained cautious amid news the EU has agreed to impose asset freezes and travel bans on four firms and four close business associates of Russian President Vladimir Putin over the Ukraine crisis.
Envoys from the 28 states meeting in Brussels are expected to impose sector-wide sanctions to four key areas: access to capital markets, defence, dual-use goods and sensitive technologies, including in the energy sector.
Concern about the impact of the EU-Russia tensions sent investors flocking to the perceived safety of German debt, with bunds hitting a record low on Tuesday morning.
The European single currency also fell to $1.3416 from $1.3438.
"Like the prior tit-for-tat exchange of token sanctions between the West and Russia, traders are concerned about how Russia will react," said Capital Spreads dealer Jonathan Sudaria.
- Earnings boost -
US stocks opened higher, lifted by earnings from drug makers Pfizer and Merck that topped  Wall Street estimates.
Five minutes into trading, the Dow Jones Industrial Average gained 0.14 percent to 17,006.31.
The broad-based S&P 500 0.13 percent to 1,981.55, while the tech-rich Nasdaq Composite Index increased 0.24 percent to 4,455.40.
Investors are now awaiting the release of key US data, including on second-quarter growth and jobs creation, which will give a better idea about the state of the economy.
On Wednesday the Federal Reserve will hold its latest board meeting, with bank head Janet Yellen facing calls to embark on a tighter monetary policy.
Shares in UBS slid 0.96 after the leading Swiss bank turned in a strong profit performance in the second quarter, even as it highlighted the stark risks financial institutions face from campaigns by tax and regulatory bodies.
A heavier tax bill dragged down second-quarter net profits at Deutsche Bank, Germany's biggest lender, by 29 percent. Shares were largely flat after the news at 0.07 percent.
British engineering firm GKN topped the London FTSE risers board, jumping 8.54 percent after it posted surging first-half profits and hiked its shareholder dividend.
In Paris, shares in auto maker Renault slid 4.29 percent to 66.51 euros on disappointing results notably because of poor cash flow.
- Sanctions worry BP -
In London, energy major BP saw its share price slide after warning that more sanctions on Russia could "adversely impact" its performance.
The group has been unaffected so far by US sanctions imposed on Russia, reporting a two-thirds boost to second-quarter net profits from the equivalent figure last year.
BP shares had risen earlier after the company revealed that net profits soared 65 percent to $3.369 billion (2.508 billion euros) in the second quarter.
That was boosted by its sale of its 50-percent stake in joint venture TNK-BP to Russian state oil giant Rosneft.
At 1452 GMT, BP was trading down 1.94 percent in London.
"BP shares initially rose, but plunged soon afterwards amidst indications of preparations by the EU to increase sanctions on Russia," said ETX Capital analyst Daniel Sugarman.
The euro rose to 79.20 British pence from 79.12 on Monday. The pound decreased to $1.6938 from $1.6983.
Asian equities extended their gains after a mixed lead from Wall Street as investors awaited the release of key US data later in the week.
Hong Kong was up 0.87 percent, Shanghai gained 0.24 percent, Tokyo rose 0.57 percent, Sydney ended 0.20 percent higher and Seoul added 0.64 percent.
The price of gold advanced to $1,307.50 an ounce on the London Bullion Market from $1,304.50 on Monday.


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