Eurozone stocks slip as EU leaders meet

GMT 16:13 2015 Friday ,22 May

Arab Today, arab today Eurozone stocks slip as EU leaders meet

German chancellor Angela Merkel (C)
London - AFP

Eurozone stock markets slid on Friday as investors' attention shifted to an EU summit over relations with the ex-Soviet states and the Greek crisis as well as US inflation data.

In the euro area, Frankfurt's DAX 30 lost 0.16 percent to stand at 11,846.18 points in afternoon deals and the CAC 40 in Paris dipped 0.03 percent to 5,144.97 points compared with Thursday's close.

But in London the benchmark FTSE 100 index rose 0.65 percent to 7,059.00 points, boosted by gains to share prices of heavyweight miners that rallied on Chinese stimulus hopes.

In foreign exchange trading on Friday, the euro dropped to $1.1035 from $1.1112 late in New York on Thursday, after US core inflation came in higher than expected and thus raised chances of a rise to interest rates.

Connor Campbell, analyst at Spreadex trading group. said the EU summit was "drawing most of the attention in Europe" while investors were also looking to the latest US inflation data to give clues on the outlook for US interest rates.
The US Labor Department reported that US consumer prices edged 0.1 percent higher in April as energy prices tumbled and food prices were flat, but excluding those elements core inflation came in at a higher than expected 0.3 percent.

While the US Federal Reserve is no longer seen as likely to raise its key interest rates in June, markets have been left uncertain over the exact timing of a hike.

A pick up in inflation would support raising rates, which would support the dollar.

"USD edges higher on higher than expected core CPI ," said City Index analyst Ashraf Laidi.

Meanwhile Wall Street stocks opened mostly lower on Friday as traders awaited a speech by Federal Reserve Chair Janet Yellen on the US economic outlook.

Five minutes into trading the Dow Jones Industrial Average had slid 0.15 percent to 18,258.84 points.
The broad-based S&P 500 retreated from Thursday's record, falling 0.18 percent to 2,127.08, while the tech-rich Nasdaq Composite Index added 0.01 percent at 4,529.82.

Investors are hoping that Yellen's speech will deliver insights into when the central bank will raise near-zero interest rates, now generally expected in September at the earliest.

- Merkel downbeat, Greece confident -

While an EU summit in Riga was focused on developing the European Union's relationship with the former Soviet states of Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine, the Greece crisis nevertheless remained in the spotlight.

German Chancellor Angela Merkel dampened hopes for an end to marathon talks with Greece on a new loan deal as cash-strapped Athens said an agreement was possible by the end of the month.
And Prime Minister David Cameron used the summit to launch his bid to recast Britain's relationship with the EU, warning of "ups and downs" before a straight in-or-out referendum on EU membership by the end of 2017.

The German economy, Europe's biggest, meanwhile appears to have reached cruising altitude as business confidence maintained its current high level in May, the Ifo economic institute said Friday.

Ifo's closely watched business climate index eased slightly to 108.5 points this month from 108.6 points in April, the think tank said in a statement.

It was the first time since September that the index has fallen, but analysts had been expecting a slightly bigger drop.

In Asia, Chinese shares were the stand-out performers on hopes that Beijing will announce fresh monetary easing measures after more disappointing economic indicators.

Tokyo reversed a morning sell-off to end 0.30 percent higher to 20,264.41 -- its best finish since April 2000, while Shanghai surged 2.83 percent, Hong Kong added 1.70 percent, and Seoul closed up 1.10 percent.


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