European Stocks Seen Steady After Yellen’s Rate Hike Talk

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European stocks are poised to open steady on Thursday as investors ponder over policy divergence between U.S. and Europe and ECB’s stimulus moves.

U.S. stocks fell modestly overnight after Federal Reserve Chair Janet Yellen told Congress the U.S. economy is performing well and a rate hike in December is a “live possibility.” If the outlook and data justify, such a move would be “a prudent thing to do,” she said.

Short-term U.S. bond yields hit 4-1/2-year highs and the dollar held steady after rising sharply on Wednesday as comments from New York Fed President Willian Dudley and a slew of upbeat U.S. data supported views of a looming rate increase.

U.S. crude futures inched higher after plunging as much as 4 percent on Thursday while gold held near one-month low. Asian stocks pared early losses as Chinese and Japanese stocks extended their previous session’s strong gains.

China’s Shanghai Composite index was up nearly 3 percent to hit a two-and-a-half-month high, with sentiment underpinned by hopes for an immediate launch of the Hong Kong-Shenzhen stock connect scheme and an unexpected announcement of a historic meeting between leaders from China and Taiwan that will take place this weekend.

Japan’s Nikkei index was up nearly 1 percent as a weaker yen sent exporters higher. All eyes are on U.S. jobs data due on Friday as a positive report would bolster the case for the Fed to raise rates this year.

In corporate news, the U.S. FDA has approved GlaxoSmithKline’s Nucala for use with other medicines to treat asthma in patients age 12 years and older.

French lender Societe Generale SA said its third-quarter group net income improved to 1.127 billion euros from 882 million euros last year.

Deutsche Telekom’s third-quarter net profit increased to 809 million euros from 506 million euros last year.

Brenntag AG has signed agreements to acquire two leading distributors in North America for $440 million.

Zurich Insurance Group posted disappointing results, with third-quarter net income plunging 79 percent from a year earlier.

The European markets ended mixed on Wednesday, with France’s CAC 40 index rising 0.3 percent and the U.K.’s FTSE 100 adding half a percent, while Volkswagen shares dragged the German DAX down about 1 percent.

 

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