Arab Today, arab today european equities creep upwards as eurozone exits deflation
Last Updated : GMT 00:26:33
Arab Today, arab today
Arab Today, arab today

European equities creep upwards as eurozone exits deflation

Arab Today, arab today

Arab Today, arab today European equities creep upwards as eurozone exits deflation

European stocks
London - AFP

European stocks posted modest gains Thursday as the euro hit a nine-week dollar peak on weak US data that dimmed the chances of a Federal Reserve interest rate hike in early summer.

Markets had fallen sharply the previous day on news that the world's biggest economy grew by just 0.2 percent in the first quarter, well below the one percent rate anticipated by analysts.

In mid-afternoon deals Thursday, however, most European indices showed limited gains as eurozone data showed that the bloc has climbed out of four months of deflation.

London's benchmark FTSE 100 rose 0.03 percent to 6,948.13 points, as investors digested a barrage of earnings before next week's general election.

Frankfurt's DAX 30 index added 0.55 percent to 11,495.65 points, and the CAC 40 in Paris crept up 0.22 percent to 5,050.59 compared with Wednesday's close.

The European single currency jumped as high as $1.1249.

"The world’s most heavily-traded FX pair has been surging higher in the recent days mainly because of weakness in US data; correspondingly, European equities have been moving south," said analyst Fawad Razaqzada at trading site Forex.com.

"Of course, the slowing pace of growth in the world’s largest economy matters for the stock market too because it is one of the main export destinations for most of the major European companies.

"A weaker euro is obviously good news for European exports. But now that it is rising, stock market speculators are paring back their bullish bets accordingly."

The euro later stood at $1.1165, up from $1.1128 late in New York on Wednesday.

"The dollar has weakened severely against the pound and the euro. This is down to the markets pushing back the expectations of a US rate rise," noted CurrenciesDirect analyst Phil McHugh.

- Emerged from deflation -

US stocks dipped in opening trade Thursday following a batch of mixed earnings, including from oil giant ExxonMobil and online listings company Yelp.

Five minutes into trade, the Dow Jones Industrial Average was down 0.06 percent, the broad-based S&P 500 lost 0.13 percent while the tech-rich Nasdaq Composite Index dropped 0.29 percent.

Most Asian stocks also sank Thursday.

Back in Europe investors also tracked official data showing that the eurozone has emerged from deflation in April, reversing a dangerous bout of declining prices.

Inflation in the 19-nation single currency bloc hit zero percent in April, after minus 0.1 percent in March, with low energy costs still impacting the cost of living, the EU statistics agency Eurostat said.

The news was welcomed at the European Central Bank, which in March launched a historic round of monetary stimulus to fight falling prices in the eurozone.

The biggest movement of leading stocks included Royal Bank of Scotland shares shedding 3.52 percent to 337.20 pence on poor results.

The state-rescued lender revealed it sank into a first-quarter net loss of £446 million ($688 million, 619 million euros) on vast provisions for restructuring and costs linked to its past conduct.

That contrasted with a net profit of £1.195 billion a year earlier.

British Airways-owner International Airlines Group saw its shares slide 3.04 percent to 542 pence.

That was despite news that IAG slashed its first-quarter net losses on increased transatlantic business, cost controls and an ongoing recovery at its Spanish wing Iberia.

On the upside, energy giant Royal Dutch Shell's 'A' share price rallied 0.34 percent to 2,059 pence.

Shell revealed that profit, adjusted for one-off items and inventory changes, sank 56 percent to $3.2 billion in the reporting period.

However, that beat market expectations of $2.5 billion, according to analysts polled by Bloomberg.

 

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Arab Today, arab today european equities creep upwards as eurozone exits deflation Arab Today, arab today european equities creep upwards as eurozone exits deflation

 



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