LONDON: European stock markets rose yesterday despite plunging Japanese stocks as traders digested US growth data and signs of improved confidence in the eurozone.
At close, London’s FTSE 100 index of leading shares gained 0.45 percent to 6,656.99 points. Frankfurt’s DAX 30 index advanced 0.76 percent to 8,400.2 points, while in Paris the CAC 40 rose 0.56 percent to 3,996.31 points.
“The significant decline of five percent overnight in Japan have dented sentiment but failed to make any real impact to the downside in European markets.... But this anomaly does beg the question, if not now, when?” said Brenda Kelly, senior market strategist at traders IG.
US stocks also gained in early trade after two days of losses, as the government’s revised estimate of first-quarter economic growth came in barely changed at 2.4 percent. “The Q1 GDP data continue to paint the picture of an economy with strengthening fundamentals that is facing significant fiscal drag,” said Ellen Zentner of Nomura Securities International.
In midday trade, the Dow Jones Industrial Average was up 0.42 percent, the broad-based S&P 500 rose 0.58 percent, while the tech-rich Nasdaq Composite Index gained 0.73 percent.
In foreign exchange trading, the euro rose to $1.3041 from $1.2938 late in New York on Wednesday.
The dollar inched up to 101.08 yen from 101.06 yen on Wednesday. On the London Bullion Market, the price of gold climbed to $1,418.50 an ounce from $1,382.50 on Wednesday.
“The euro has... derived support in the near-term from the stronger than expected rebound in German inflation to 1.5 percent in May which modestly lowers the probability of another... (ECB) rate cut in June,” said Lee Hardman currency analyst at the Bank of Tokyo-Mitsubishi UFJ in London.
Hardman added that the European single currency should win support also from “a slower pace of fiscal tightening” after the European Commission gave eurozone heavyweights France and Spain extra time to meet their budget deficit targets.
Asian stocks fell, with Tokyo plummeting more than five percent as the yen gained strength, after a series of economic forecasts underlined concerns over global growth, traders said. Tokyo stocks tumbled 5.15 percent to 13,589.03 points as jittery investors dumped shares following a sharp fall on Wall Street.
Sentiment was downbeat after the Organisation for Economic Cooperation and Development on Wednesday trimmed its world economic growth forecast for 2013 to 3.1 percent from 3.4 percent. The OECD slashed its growth forecast for the world’s most advanced economies, except Japan, but said growth should pick up later this year. AFP
