(MENAFN– ecpulse)
European stocks saw a lower opening on Tuesday tracking losses in Asia and Wall Street on worries the United States Federal Reserve may draw back its enormous stimulus plan.
- STOXX Europe 600 lost 0.87% to 302.13
- Euro Stoxx 50 fell 0.78% to 2,699.77
Equities fell in Europe and Asia, while bonds and currencies remained down, as traders anticipate the Fed’s next move. Will the Fed soon begin to wind down its massive monthly $85 billion bond-buying plan?
Well, some analysts suggest Chairman Ben S. Bernanke is going to reverse course as soon as September, while others expect the tapering move to come by the end of this year. The consensus, in general, considers the possibility that monetary policy could tighten again sooner rather than later.
Global markets continue to worry about how the policy vote went at the Fed`s last meeting, and focus for many remained the continuing rise in interest rates, after we saw yields on the 10-year treasury note hit a two-year in the past couple of days.
Therefore, markets will be closely tracing any leads over interest rates, and Wednesday’s minutes from the last Fed meeting could offer so when the U.S. central bank will wind down its massive monetary stimulus plan.
Back in Europe, the economic agenda is quite shy today, only with July German PPI and June Eurozone Construction output on the table.
German PPI growth eased unexpectedly to 0.5% year-on-year, slightly down from 0.6%. Analysts called for an average forecast of 0.7%.
The Eurozone Construction output is due to be published later in the day at 09:00 GMT.
- Britain`s FTSE 100 fell 0.85% to 6,407.99
- France CAC 40 declined 0.85% to 4,049.18
- German DAX edged lower 1.16% to 8,269.60
German Chancellor Angel Merkel refused talks to introduce euro bonds and a common debt redemption fund. In France, President Francois Hollande wants to go further in overhauling the French economy, Prime Minister Jean-Marc Ayrault said.
On the corporate front, British miner Glencore Xstrata plunged 3.25% to 292.150 pence after reporting first-half adjusted net income of $2.4 billion, down 39% from a year earlier.
The Baar, Swizerland miner, which was created through a multibillion-dollar merger, said it has recorded an impairment charge of $8.47 billion against the value of its assets, which contributed to a net loss in the first half of the year.
Anglo-Australian mining giant BHP Billiton slid 2.78% to 49.03 euros after reporting full-year net profit of $10.88, down 30% from a year.
Swiss chocolate maker Lindt & Spruengli rose 2.7% to 43.390 francs after reporting earnings before interest and taxes of $53 million, beating analsyts` forecast.
Separately, the currenies market saw mixed movements in the morning hours as the dollar reversed this week`s gain against a six-currency basket. Meanwhile, the euro is holding above $1.3315 levels, extending the bullish bias despite its weakness.
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