European stocks rise before Fed, Scotland vote

GMT 14:38 2014 Wednesday ,17 September

Arab Today, arab today European stocks rise before Fed, Scotland vote

Frankfurt's DAX 30 index
London - AFP

European stocks climbed on Wednesday, mirroring gains elsewhere, with sentiment buoyed by reports of Chinese stimulus, ahead of a US interest rate call and on the eve of Scotland's independence referendum.
Shortly after midday in the British capital, London's benchmark FTSE 100 index added 0.22 percent to 6,807.27 points as traders looked ahead to Scotland's independence vote.
In Paris, the CAC 40 index gained 0.72 percent to stand at 4,440.81, with the market bolstered after the French government won a confidence vote over its economic reforms.
Frankfurt's DAX 30 advanced 0.48 percent to 9,678.86 points compared with Tuesday's closing level.
"Liquidity moves by the Chinese central bank and dovish noises regarding the Fed meeting have seen markets make tentative gains," said analyst Chris Beauchamp at trading firm IG.
- China stimulus boost -
Asian equities mostly rose, with Hong Kong and Shanghai lifted by a report that China's central bank had pumped $81 billion into the country's five biggest lenders, while traders awaited the Fed's monetary policy decision.
Wall Street stocks posted solid gains overnight following reports of the new Chinese stimulus plan on the eve of the Fed announcement.
"Last night's US session saw the Dow finish at a new all-time closing high, with a fresh intraday high to boot, and the positive momentum has been carried across in London," said Beauchamp.
"Added to this was news last night that the 'No' campaign still has the advantage -- albeit a small one -- over its rivals."
Campaigners for, and against, Scottish independence scrambled for votes on Wednesday on the eve of a knife-edge referendum that could see Scotland break away from the United Kingdom.
Three new opinion polls published in Wednesday's papers all suggested a very narrow majority supporting staying in the UK but also showed that undecided people could swing it either way.
Global equities won support from a report on web portal Sina, which said the People's Bank of China would inject 500 billion yuan ($81 billion) into the five top state-owned banks, with a view to boosting lending to businesses.
The move would be a major stimulus injection following a string of weak data -- including on trade and industrial output -- that has raised questions about the state of the world's number two economy.
The injection, a three-month low-interest rate loan, is similar to a 0.5 percentage point cut to the ratio of cash China's entire banking system must keep in reserve, according to Dow Jones Newswires.
In reaction, Shanghai stocks rose 0.49 percent, Hong Kong jumped 1.00 percent and Seoul advanced 0.96, but Tokyo fell 0.14 percent.
- Focus turns to Fed -
Investors globally have meanwhile been pulling their cash off the table recently on speculation the Federal Reserve will bring forward its timetable for raising interest rates as the US economy picks up speed.
The Fed has previously said it would keep rates low for a "considerable time" after ending its massive stimulus programme.
There are still concerns about the US economy among many investors, with some suggesting the bank will stick to its cautious approach.
Back in Britain however, attention was squarely focused on Scotland's looming referendum.
The pound had last week slumped to 10-month dollar low and three-month euro troughs on fears over the impact of possible Scottish independence.
In Wednesday deals, the pound rose to $1.6296 from $1.6268 late in New York on Tuesday.
The euro retreated to 79.52 pence from 79.64 pence.
The European single currency edged up to $1.2959 from $1.2957 on Tuesday.
On the London Bullion Market, gold gained to $1,236.15 an ounce from $1,232.25.


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