Russian aid convoy fears drive European shares lower

GMT 19:55 2014 Friday ,22 August

Arab Today, arab today Russian aid convoy fears drive European shares lower

Germany's DAX index at the stock exchange in Frankfurt
London - AFP

European stocks fell on Friday, hit by fresh signs of an escalation of the conflict in Ukraine after a key speech from US Federal Reserve chief Janet Yellen left markets adrift.
The British capital's benchmark FTSE 100 index edged down 0.04 percent, ending the day on 6,775.25 points.
The London market will remain closed on Monday for a public holiday.
Frankfurt's main DAX index lost 0.66 percent to 9,339.17 points while in Paris, the CAC 40 sank 0.93 percent to 4,252.80 points, compared with Thursday's close.
"Global equity markets faced broad selling pressure on Friday as investors took profits on flaring geopolitical tensions," said Kash Kamal at Sucden Financial.
"European benchmark equity indices had found tentative support around yesterday's close but as news of Russia's aid convoy crossing into Ukraine broke, stocks across the region pared some of the weekly gains."
Shares sank after news the first lorries of a mammoth Russian aid convoy had arrived in east Ukraine's rebel bastion of Lugansk after crossing over the border without Kiev's permission.
Kiev called the action an invasion and the EU a "clear violation" of Ukraine's border, accusations that Russia rejected.
The news interrupted a quiet session as investors awaited news from the Fed's annual central banking symposium.
"There was a sudden sell-off midway through the European trading session when memories came flooding back of last Friday afternoon with headlines of a Russian convoy moving into Ukraine," said Jasper Lawler at CMC Markets.
- Markets weigh Yellen -
Federal Reserve Chair Janet Yellen gave no clear new signs for the future of monetary policy in the world's biggest economy in a closely watched speech to leading central bankers in Jackson Hole, Wyoming.
There still remains "considerable uncertainty about the level of employment," she said, admitting that analysing economic data had been "especially challenging recently".
"There is no simple recipe for appropriate policy in this context," she said.
The European single currency slumped to its lowest point in almost a year against the dollar at $1.3221 as Yellen's comments supported the greenback.
The euro later recovered to $1.3233, from $1.3281 late in New York on Thursday.
"Comments made by Yellen... indicate a more neutral viewpoint on the amount of spare capacity in the labour markets, hinting at the possibility of a rate rise earlier than previously expected," said Kamal.
US stocks pared some earlier losses after the gains, although the S&P 500 lost ground compared to Thursday's record close.
In mid-afternoon trading, the Dow Jones Industrial Average fell 0.16 percent to 17,012.68 points.
The broad-based S&P 500 dipped 0.15 percent to 1,989.43, while the tech-rich Nasdaq Composite Index rose 0.16 percent to 4,539.27 points.
European equities had marched higher on Thursday, cheered by hints the Fed could raise interest rates sooner than expected in view of US growth.
The Jackson Hole Symposium on Friday will also feature speakers from the Bank of England, the European Central Bank and the Bank of Japan.
- Asia stocks mainly climb -
Asia's main stock markets mostly pushed higher after a rally on Wall Street on Thursday.
Hong Kong gained 0.47 percent, Shanghai added 0.46 percent, Sydney rose 0.12 percent and Seoul climbed 0.61 percent, while Tokyo slipped 0.30 percent.
Sentiment was boosted by positive US data on Thursday, including a pick-up in existing-home sales in July and a downturn in new claims for unemployment insurance.
In corporate news, London Stock Exchange shares jumped 1.20 percent after its net profits surged by nearly 50 percent in the first quarter on the back of a resurgence in stock market flotations
In foreign exchange deals, the euro eased to 79.85 pence from 80.10 pence late in New York on Thursday. The pound dipped to $1.6572 from $1.6580.
The price of gold meanwhile slid to $1,277.25 an ounce, from $1,275.25 on Thursday on the London Bullion Market.

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