European stocks claw back ground as markets steady

London — European stocks, bonds and the dollar traded in a calmer fashion on Monday after last week's turbulence, though another three percent dive in Japan's Nikkei kept investors on edge.

Last week's shakeout of equity, bond and currency markets was triggered by concerns the US Federal Reserve could wind in its support sooner that had been expected, weak China data and doubts over how low Japan will allow the yen to go.

With UK and US markets both closed for public holidays, European equity and bond markets saw a quieter than usual start to the week.

The FTSEurofirst 300 index of top European shares started up 0.3 percent as last week's falls tempted buyers, while demand for safe-haven 10-year German government bond futures eased.

The dollar was also steadier, though it dipped to 101.00 against the yen as the latest steep fall in Japanese equities saw investors continue to unwind their dollar hedges and head for bonds. The euro was little changed at $1.2940.

"Markets are currently experiencing difficulty fully and precisely understanding both the pace of global growth and the implications of central banks' activism," Credit Agricole said in a note.

"Expectations cannot remain stable for long and so investors should be prepared for periods of higher volatility in particular asset classes," they added.

In commodity markets, Brent crude slipped towards $102 per barrel, extending last week's 2 percent drop, as a weak economic outlook in a well-supplied market pressured prices. The broader market nerves also helped gold firm as it looked to build on last week's best run in a month. — Reuters

 

source: gmanetwork.com

Europe stock rally pauses; further gains eyed

Paris — European shares dipped early on Monday as investors took a breather following the previous week's rally to multi-year highs, although further gains were seen on the back of strong support from central banks.

Trading volumes were thin with the UK stock market, Europe's largest, closed due to a national holiday.

At 0745 GMT, the euro zone's blue chip Euro STOXX 50 index was down 0.3 percent at 2,756.73 points. On Friday, the benchmark topped its 2013 high hit in January and surged to a near-two year peak of 2,764.17, rising after better-than-expected US monthly jobs data.

"Now that the index crossed above its 2013 high, the mood is definitely bullish," said Guillaume Dumans, co-ahead of 2Bremans, a Paris-based research firm using behavioral finance to monitor investor sentiment.

"Central bank action is the main reason behind the rally, and it eclipses for now any worries about the macro economy."

Around Europe, Germany's DAX index was down 0.1 percent, but with its record high still in sight, and France's CAC 40 was down 0.2 percent, retreating from a near-two year high hit last week.

Spain's IBEX was down 0.1 percent and Italy's FTSE MIB down 0.4 percent.

French utilities GDF Suez and EDF were down 1.2 percent and 0.7 percent respectively, as investors worried about potential stake sales from the French state after Prime Minister Jean-Marc Ayrault said on Sunday the government was considering selling part of its holdings in a number of firms.

On the earnings front, German industrial gases producer Linde rose 3 percent after posting better-than-expected results.

The Euro STOXX 50 index surged 3 percent last week, boosted by the European Central Bank's interest rate cut as well as an unexpectedly robust US monthly jobs report which eased worries over the pace of economic growth in the world's biggest economy.

"The positive trend could accelerate with the Euro STOXX 50 rising towards its 2011 highs," Aurel BGC chartist Gerard Sagnier said.

"Every dip will be an opportunity to buy." — Reuters

source: gmanetwork.com