European stocks drop on China woes

0
690

European stocks drop on China woesLONDON: European stock markets slid on Wednesday, dragged down by volatile trading in Shanghai amid concerns over the world’s second biggest economy China, traders said.

Shanghai’s index managed to close 1.23 percent higher, thanks to late bargain hunting after a more than five percent plunge in morning trade.

London’s benchmark FTSE 100 index fell 1.02 percent to stand at 6,459.87 points during mid-afternoon trade in the capital.

Article continues below Advertisement...

Frankfurt’s 30 dropped 1.49 percent to 10,753.58 points and the CAC 40 in shed 1.11 percent to 4,915.29 compared with Tuesday’s close.

Athens’ main index however rose 0.51 percent to 676.58 points, as the voted by an overwhelming majority to back a third bailout for Greece, with Chancellor Angela Merkel spared a major rebellion of legislators opposing the aid.

In foreign exchange, the euro rose to $ 1.1039 from $ 1.1029 late on Tuesday in .

The dollar dipped before the release of minutes from the US Federal Reserve’s last meeting, which hope will offer fresh clues about the of an interest rate rise.

European equity markets meanwhile dropped “as once again weaker markets in are souring sentiment for investors”, said Markus Huber, senior analyst at brokers Peregrine & Black.

Asian stock markets closed mixed on Wednesday, with Shanghai rebounding from heavy falls on more state support, while Tokyo slumped after the release of weak trade data.

China’s central bank has made $ 17 billion (15.3 billion euros) available to more than a dozen financial institutions to help boost the economy, it said Wednesday, a day after injecting nearly $ 100 billion into two government policy banks.

– Waiting for the Fed –

Elsewhere, markets were eyeing the Fed minutes to see if they back up growing expectations of a US rate hike as early as next month.

Some analysts have argued that the US central bank could delay any increase following China’s devaluation of the yuan last week — news that weighed on the dollar.

“Fed Chair Janet Yellen has been very clear in her view in recent months that the first rate hike in more than nine years should come this year,” noted Craig Erlam, senior market analyst at Oanda trading group.

“Inflation has been a key concern for the US for some time and the strong dollar has not helped matters. The low inflation environment is expected to continue for some time yet, with wages likely to remain fairly suppressed as US companies do whatever it takes to compete with their foreign peers,” he added.

Briefing.com analyst Patrick O’Hare agreed the recent events — including China’s currency devaluation and a further slide in oil prices — may have overtaken the Fed’s earlier deliberations.

“The major risk with the minutes today is that they will be over-analysed and subject to accusations that (what) was said then may not necessarily apply now,” he said.

Awaiting word from the Fed opened lower Wednesday, with the Dow Jones Industrial Average down 0.76 percent 17,378.29 to points five minutes into trade.

The broad-based S&P 500 dropped 0.58 percent to 2,084.78 points, while the tech-rich Nasdaq Composite Index lost 0.58 percent at 5,029.80.

Back in , lawmakers in the German Bundestag lower house approved the 86 billion euro ($ 95 billion) bailout to Greece by 454 votes to 113.

As Europe’s biggest economy and contributor to Greek aid, Germany plays a key role in the emergency package approved also by eurozone finance ministers.

Copyright (Agence -Presse), 2015

LEAVE A REPLY

Please enter your comment!
Please enter your name here