(MENAFN– ecpulse)
European shares edged lower for the third straight day Tuesday, as investors maintained cautiousness ahead of the highly anticipated U.S. nonfarm payrolls report on Friday.
Investors look forward to reports on third quarter U.S. economy growth and the jobs report later in the week to assess the economy’s condition for clues regarding the Federal Reserve’s future course for monetary policy.
A strong report on the U.S. manufacturing sector out on Monday stirred fears the reduction in bond buys could come as early as at the December meeting.
In its latest policy statement, the U.S. central bank said Wednesday it will continue buying $85 billion in bonds every month and keep its benchmark short-term interest rate near zero. The bond purchases are designed to keep borrowing costs low to encourage hiring and investment.
While the Fed’s decision was mostly expected by investors, its comments that there was underlying strength in the broader economy seemed to have sparked fears in the market that the tapering could be brought forward.
- Stoxx 600 lost 0.80 percent or 2.59 points to 321.51
- Stoxx 50 dropped 0.95% to 3048.11 . As of 05.33 a.m. EST.
U.K. retail sales increased 2.3 percent in November following the 2.6 percent gain in the previous month, according to data released by the British Retail Consortium. Same-store sales rose 0.6 percent in the month, a slight decrease from the 0.8 percent gain in October.
Reports on producer prices from the euro area and construction PMI from the U.K. are scheduled to be released later in the European session.
Asian markets are broadly lower on stimulus worries, although Japanese shares rose notably amid a weaker yen.
The yen is hovering near six-month lows against the dollar and five-year lows versus the euro on speculation the Bank of Japan is considering expanding its stimulus efforts to achieve its 2 percent inflation target.
Meanwhile, China`s non-manufacturing PMI dropped to 56 in November from a 14-month high of 56.3 in the previous month, official data released today showed.
The Reserve Bank of Australia left its official cash rate on hold, in line with economists` forecasts, while reiterating that a low exchange rate is needed for balanced economic growth.
In corporate news, global miner Rio Tinto announced at an investor seminar today that it plans to reduce capital spending from last year`s peak of $17.6 billion to $8 billion over the next two years.
-The British FTSE 100 lost 0.72% or 47.31 points to 6548.04
-The French CAC 40 lost 1.43% or 61.42 to 4224.39
-Frankfurt’s DAX 30 lost 0.84% or 79.30 points to 9322.58
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