(MENAFN– ecpulse)
European shares edged higher Wednesday, poised to record their first positive session after data showed improved services activity in the Eurozone ahead of a the European Central Bank monetary policy decision.
Crucial to the Fed’s thinking is the health of the US labor market and so investors will be keen to see Wednesday’s ADP private sector employment report ahead of Friday’s official November non-farm payrolls data.
- Stoxx 600 gained 0.04 percent or 0.13 points to 319.26
Stocks in Europe had slumped 1.53 percent with growing concern over the "tapering" of the U.S. Federal Reserve`s quantitative easing program. Disappointing data from the euro zone also weighed on stocks on Tuesday and U.S. markets also saw profit taking.
A better than expected US manufacturing survey released on Monday boosted speculation the Fed could begin tapering before the end of the year. US 10-year yields rose to a two-month high of 2.81 per cent and are currently 2.79 per cent.
Disappointing data from the Eurozone also weighed on stocks on Tuesday, with the FTSEurofirst 300 closing at a six-week low.
The producer prices index (PPI) declined 0.5 percent on month in October, worse than expected. PPI fell 1.4 percent on year; the reading was below expectations and further signaled that the euro zone is not yet in recovery mode.
- Stoxx 50 gained 0.34% to 3024.12 . As of 04.06 a.m. EST.
Eurozone PMI
A range of reports in the Eurozone showed a lackluster performance of services activity in November, adding to concerns regarding the pace of growth in this quarter ahead of the European Central bank meeting tomorrow.
A Composite of both manufacturing and services came at 51.7, beating estimates of 51.5 but was still lower than October’s 51.9, which was the highest since June 2011.
Services PMI dropped to 51.2 from 51.6 in October, however higher than estimates that called for a drop to 50.9.
In Germany, services showed expansion as the index climbed to 55.7, up from October’s reading of 52.7 and the preliminary estimate of 54.5.
Spain’s services indicator climbed to its highest level in over 3 years as it edged up to expansion at 51.5 from 49.6. Italy’s services activity contracted in November as the purchasing managers’ index for declined to 47.2, failing estimates that called for a drop to 50.4 from 50.5.
The data has put Thursday`s European Central Bank`s (ECB) meeting in focus, with analysts awaiting the central bank`s economic forecasts. If the ECB indicates inflation will remain below its target into 2015, it could mean that there will be new liquidity measures next year.
Corporate News
In stocks news, Tesco shares opened 1.7 percent higher. The U.K. supermarket reported a sharp drop in third-quarter like-for-like sales on Wednesday, but the losses of 1.5 percent i the third quarter were actually slightly better than market expectations for a 1.8 percent fall.
Standard Chartered shares fell over 4 percent in early trade after the group said income this year would be similar to that in 2012. The news comes after a slowdown in Asian growth in the past five months.
European Union antitrust regulators will fine five banks including Deutsche Bank for rigging yen Libor and Tibor interest rate benchmarks, a person familiar with the matter told Reuters on Tuesday.
-The British FTSE 100 gained 0.11% or 7.38 points to 6539.81
-The French CAC 40 gained 0.42% or 17.61 to 419.05
-Frankfurt’s DAX 30 gained 0.26% or 2.39 points to 9247.79
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