Tuesday, 15 September 2015 18:50
LONDON: European stocks rose Tuesday as traders shrugged off a drop in German investor confidence, focusing instead on the week’s key event — the outlook for US interest rates.
London’s benchmark FTSE 100 index added 0.18 percent to stand at 6,095.66 points in afternoon deals, putting aside official data showing British inflation fell back to zero in August.
In the eurozone, Frankfurt’s DAX 30 rose 0.37 percent to 10,168.94 points and the CAC 40 in Paris climbed 0.57 percent to 4,543.73 compared with Monday’s close.
In foreign exchange activity, the euro dipped to $ 1.1305 from $ 1.1317 late on Monday in New York.
Wall Street stocks opened higher Tuesday, as investors took worse-than-expected US data as a signal that the US Federal Reserve may put off raising interest rates for a few more months at their meeting later this week.
Five minutes into trade, the Dow Jones Industrial Average rose 0.26 percent to 16,413.78 points.
The broad-based S&P 500 climbed 0.22 percent to 1,957.42, while the tech-rich Nasdaq Composite Index gained 0.12 percent to 4,811.74.
US retail sales rose 0.2 percent in August, boosted by robust auto sales, but slightly below analysts’ consensus estimate.
Industrial output fell by 0.4 percent in August from the previous month, more than the 0.2 percent drop expected by analysts.
The indicators were among few remaining US data points ahead of the Federal Reserve’s two-day monetary policy meeting that begins Wednesday. Speculation is divided over whether the Fed will deem the economy strong enough to withstand the first rate hike since 2006.
“Trading volume will likely be on the light side again today as participants adopt a guarded approach ahead of Thursday’s rate hike decision,” said Briefing.com analyst Patrick O’Hare.
In Europe, investor sentiment has slumped in Germany this month over concerns that sharply slowing growth in emerging markets will hurt the vital export sector of the eurozone’s top economy, a leading survey said Tuesday.
The widely watched investor confidence index calculated by the ZEW economic institute sank 12.9 points from August to stand at just 12.1 points — a level not seen for almost a year and far short of analysts’ expectations.
“September’s ZEW survey confirmed that recent market turmoil and concerns over the global environment have had an adverse impact on German investor confidence,” said Jonathan Loynes, chief European economist at research group Capital Economics.
Analysts were quick to point out, however, that the German economic engine was in good shape overall and that weakness in demand from China could increasingly be compensated by growth in Europe and the United States.
In Asia trading on Tuesday, Tokyo won 0.34 percent, closing higher for the first time in four sessions after the Bank of Japan refrained from unleashing fresh monetary stimulus amid unease over much of the world economy.
Despite Tokyo’s bounce, lingering concerns about the state of China’s economy dragged down shares in Shanghai and Hong Kong.
The car manufacturing sector was meanwhile in focus on the corporate front with the IAA auto show on in Frankfurt and as US giant Ford said it has no concrete time schedule for when it aims to return to profit in Europe.
