European Stocks Down as Markets Await Key Data
BERLIN – European stocks nudged lower Monday, while the dollar continued to trade around ¥100, as investors waited for key data releases to gain direction and further clues on the Federal Reserve’s monetary policy.The main European benchmark indexes were around 0.2% lower as investors paused for breath and looked for fresh catalysts after six straight weeks of gains. Market participants will eye Tuesday’s ZEW survey from Germany, along with the Federal Open Market Committee’s October minutes on Wednesday, which will be scrutinized for further hints on the timing of any scaling back of the central bank’s $85 billion-a-month asset purchases.
Crédit Agricole Corporate & Investment Bank said the focus will be on any discussions regarding potential changes to the forward guidance, such as a lowering of the unemployment rate threshold below 6.5%, particularly after Federal Reserve Vice Chairwoman Janet Yellen’s remarks last week.
It was a much brighter picture in Asian trading, however, as investors welcomed details of China’s economic reforms. China’s Shanghai Composite Index surged 2.9%, while Hong Kong’s Hang Seng gained 2.7% as market participants got their first chance to react to the reform plan released by Beijing Friday. According to the terms of the new plan, the government will open the financial sector and relax restrictions on investment. In addition, the government pledged to improve the country’s initial public offering system to adopt a more market-oriented approach where companies can list according to their merits.On the corporate front, Aberdeen Asset Management rose sharply after the release of its full-year results and following news that it will buy Scottish Widows Investment Partnership from Lloyds Banking Group.
Shares in European Aeronautic Defence & Space Co. were up after the company posted orders for its A380 superjumbo and new long-range A350 at the Dubai air show.
Sonova gained after raising its full-guidance, as it reported a 10.6% rise in first-half profit.
On the downside, Petrofac tumbled after the company released a cautious statement, saying it expects net income in 2014 to see flat to modest growth year-on-year.
In currency markets, the dollar was steady against the yen and the euro. The greenback was at ¥99.98 from ¥110.18, while the single currency was at $1.3494 from $1.3495.
– WALL STREET JOURNAL