Sharechat Logo

While you were sleeping European stocks advance

Tuesday 18th February 2014

Text too small?

European stocks climbed as Chinese credit data provided reason for optimism about the outlook for the world's second-largest economy.

Commodities including silver and copper also gained, as the US dollar weakened amid expectations the Federal Reserve won't need to raise interest rates any time soon with data that have recently surprised more on the downside, than the upside.

China's new credit climbed to a record in January, with aggregate financing rising to 2.58 trillion yuan (US$425 billion) last month, according to the People's Bank of China.

"The better-than-expected credit data out of China gives the markets some support," Benno Galliker, a trader at Luzerner Kantonalbank in Lucerne, Switzerland, told Bloomberg News. "There are fears that the measures taken by China are hitting the breaks too hard and that the economy won't grow as fast anymore. Today's numbers speak a different language."

In Europe, the Stoxx 600 Index finished the session with a 0.4 percent gain from the previous close. France's CAC 40 slipped 0.1 percent, while Germany's DAX inched lower as well.

The UK's FTSE 100 climbed 1.1 percent amid further signs the country's economic recovery is gathering steam. Shares of Hammerson rose, closing 3.1 percent higher, after the company posted earnings that pleased investors and bolstered confidence about the outlook for UK corporate profits.

"When you look at property, it's always a great barometer for confidence," Mike McCudden, head of derivatives at Interactive Investor, told Reuters. "When you see the likes of [Hammerson] coming out with good numbers it perks up the whole market."

Copper rose, advancing 0.6 percent on the London Metal Exchange, as did silver and gold.

Some believe gold will likely continue its recent climb, beginning its recovery from last year's slump and rising to the highest level in three months today.

"It is the insurance product against further emerging market turmoil, more bad US data, potentially too frothy equity markets and unforeseen market shocks," UBS analysts wrote in a report, according to Bloomberg News. "With positioning so light and the sentiment turn in gold's favour so recent, we expect that gold will remain bid."

US markets were closed on Monday for the Presidents' Day holiday.

On Wednesday, minutes of the January FOMC meeting will be released, and investors will comb them for further clues about outlook for the Fed's plans to taper its bond-buying programme, now at US$65 billion a month.

Later today the Bank of Japan will conclude a regularly scheduled two-day policy meeting. The focus will be on Governor Haruhiko Kuroda's comments on the outlook for the nation's economy.

 

BusinessDesk.co.nz



  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

NZ dollar eases after another Brexit failure
SkyCity, Fletcher won't name their insurers
NZ stocks smacked by smelter review, SkyCity fire
No govt cash for Tiwai Point - Woods
Strong dairy exports narrow Sept trade deficit
Rio Tinto reviewing future of Tiwai Point smelter
SkyCity convention centre damages dispute murkier after fire
Air NZ ends LA-London service; 155 jobs at risk
Kiwi dollar up against UK pound on Brexit ructions
Contractor retentions regime a lemon, industry told

IRG See IRG research reports