Member access

4-Traders Homepage  >  News

News

Latest NewsCompaniesMarketsEconomy & ForexCommoditiesHot NewsMost Read NewsRecomm.Business LeadersVideosCalendar 

European Stocks, Crude Slump; Bunds, Dollar Gain on FOMC

02/21/2013 | 05:45am US/Eastern
Recommend:
0

European stocks and crude oil prices slumped Thursday, while perceived safe-haven assets such as the dollar and German Bunds rallied as investors digested the decidedly more hawkish tone of the latest Federal Open Market Committee minutes and a series of disappointing euro-zone data.

The FOMC minutes showed officials last month were worried that the central bank's easy-money policies could lead to instability in financial markets and may be difficult to pull back in the future. Some officials said the central bank should change the pace of its asset purchases, while others argued that any easing may need to remain in place until the job market improves substantially.

Paul Ashworth at Capital Economics said the minutes "suggest that rising fears over the potential costs from further quantitative easing could prompt Fed officials to reduce or even halt the central bank's monthly asset purchases sooner than most market participants had been expecting."

He added: "As it stands now, the Fed is more likely to halt QE3 in the second half of this year rather than the first half of 2014, although a re-emergence of the euro-zone crisis later this year could put paid to the central bank's current plans."

In currency markets, the pound took the biggest beating after the release of the minutes, briefly falling to its lowest level against the dollar since July 2010.

The euro came under further pressure against the greenback following the release of disappointing German PMI surveys for February, with both the manufacturing and services indexes falling short of expectations. The single currency slid to a fresh six-week low against the dollar after the data came out, while Bunds extended gains. The same data for France and the euro zone as a whole also missed expectations.

"Today's figures are a reality check: the improvement in Europe has until now been a financial markets story, while the real economy remains in the doldrums," said ING. "More needs to happen to put the euro zone on a sustainable recovery path."

Crude oil prices fell as the greenback's rally diminished the comparative appeal of dollar-denominated resources. Still, the gold price recovered a little Thursday following steep declines in the previous session.

In equity markets, basic resources suffered the heaviest losses, with the Stoxx Europe 600 index for the sector down 2.2%. Any rise in the dollar makes commodities priced in the greenback more expensive to investors holding other currencies.

Among individual stocks, shares in French insurer AXA fell after the company reported a drop in full-year net profit and said it would implement additional cost-cutting measures.

French retailer Casino Guichard-Perrachon slipped after it posted a slight drop in underlying net profit for 2012.

Swiss Re bucked the trend, however, gaining after the company reported a 62% increase in full-year net income and said it was well positioned in 2013 despite the challenging outlook in developed economies.

In London, BAE Systems was also on the front foot after the company announced a GBP1 billion share buyback with its full-year results.

Write to Michele Maatouk at michele.maatouk@dowjones.com

Subscribe to WSJ: http://online.wsj.com?mod=djnwires

Recommend :
0
React to this article
Latest news
Date Title
1m ago RESEARCH AND MARKETS : MDPE (Medium Density Polyethene) Technical Material Market Report
2m ago MCDONALD : Russia making checks at McDonald's in two more regions - Ifax
3m ago MITSUI : to Acquire DuPont™ Kocide® Copper Fungicide Business Assets
3m ago PT MEDCO ENERGI INTERNASIONAL TBK : MedcoEnergi Completion of EP Asset Acquisition in Tunisia
3m ago NEW TOYO : Disclosure of Interest/ Changes in Interest of Director/ Chief Executive Officer :: Disclosure of Interest of Director
3m ago KONINKLIJKE AHOLD : Ahold share buyback update
3m ago SINOFERT : Announces 2014 Interim Results
3m ago QUINDELL : Executive Appointment
3m ago QUINDELL : Interim Results for the six months ended 30 June 2014
3m ago KONINKLIJKE AHOLD : Ahold Q2 2014 Results
Latest news
Advertisement
Hot News 
IOMART : founder supports takeover
RECTIFIER : Patent Issued for III-Nitride Semiconductor Device with Stepped Gate
VITEC : An Application for the Trademark "BATTERY PAIN SCALE" Has Been Filed by Vitec Group
RTL : cuts 2014 outlook on new advertising tax in Hungary
PACIFIC ASSETS : Monthly Fact Sheet
Most Read News
1d ago HEWLETT PACKARD : posts surprise revenue gain after PC sales jump
1d ago JPMORGAN, BOFA TO RAISE JUNIOR BANKER PAY BY 20 PERCENT : sources
1d ago CITIGROUP : About 25 percent of Detroit's water and sewer bonds tendered so far
1d ago VERIZON COMMUNICATIONS : Wireless : Named Top In Overall Network Performance In Virginia In Report By RootMetrics®
1d ago AEROPOSTALE : Ex-Aeropostale executive gets eight years prison over kickbacks
Most recommended articles
2m ago MCDONALD : Russia making checks at McDonald's in two more regions - Ifax
5m agoDJCURRENCIES : Dollar Extends Gains Against Yen On Hawkish FOMC Minutes
6m ago EURO ZONE BUSINESS GROWTH SLOWS IN JULY, PRICES FALL : Pmi
8m ago NZD/USD Cracks Key Support As Bullish Reversal Patterns Left Lacking
10m ago German private sector growth in August points to strong Quarter3-PMI
Dynamic quotes  
ON
| OFF