(MENAFN– ecpulse)
European equity markets moved lower in early European trades as investors turned their attention to safe-haven assets as renewed tensions in Ukraine weighed on market sentiment, and after news that Argentina has entered its second default in 13 years.
US, EU poses new round of sanctions on Russia
Reports of additional tougher sanctions on Russia by the U.S. and European Union for its support to separatists in Ukraine offset gains after some strong U.S. economic growth data. The U.S. package was the largest round of penalties so far, pushing Russian stocks and the ruble tumbling.
Argentina defaults for a second time in 13 years
Argentina went into technical default for a second time in 13 years at midnight on Thursday, within hours after talks with holdout creditors broke down on Wednesday.
After news, U.S. ratings agency Standard & Poor`s downgraded the country`s long- and short-term foreign currency credit rating to "selective default."
As of 04:09 EST:
- STOXX Europe 600 fell 0.67 percent to 338.16 points
- Euro Stoxx 50 lost 0.70 percent to 3,147.01 points
Markets await euro-area inflation, unemployment data
On data front, Thursday’s European macroeconomic agenda will provide investors with latest updates on the Eurozone`s flash consumer prices for July along with June’s unemployment rate report. Data due later in the day will definitely be worth watching.
This morning the focus will be on the Eurozone, where we’ll get the latest update on the unemployment situation. The rate is expected to remain unchanged at 11.6 percent in July.
Also markets will be keeping a close watch on a Eurozone inflation report for July as the European Central Bank (ECB) comes under mounting pressure to tackle deflationary risks.
Inflation is expected to steady at 0.5 percent– sharply below the ECB’s inflation goal of 2.0 percent.
Earlier in the day, data on Germany showed unemployment rate for the 18-member eurozone as a whole remained stagnant at 6.7 percent, while the number of Germans registered as unemployed dropped 12,000 in July, beating expectations of 5,000 decline.
- British FTSE 100 was down 0.07% to 6,768.67 points
- Germany`s DAX edged 0.95% lower to 9,500.42 points
- France’s CAC 40 index declined 0.51% to 4,291.22 points
On earnings front, Shares of oil and gas major Royal Dutch Shell traded 3.5 percent higher on Thursday morning, after it reported second-quarter earnings of $5.1 billion, compared with $2.4 billion for the same quarter a year before.
In France, BNP Paribas posted a $5.7 billion loss for the second-quarter, after being hit by a near $9 billion U.S. fine. The loss was expected however.
Global markets
In Asia, stocks were mixed, after news the International Monetary Fund (IMF) urged China to cut its 2014 growth target and flagged near-term risks from its property sector.
Moving to Wall Street, shares ended mixed in the previous session after data showed U.S. Gross Domestic Product (GDP) for the second quarter rebounded more than expected. The economy grew 4.0 percent following a revised 2.1 percent decrease in the first quarter, with economists anticipated a 3.0 percent rise.
Separately, a report from payroll processor ADP showed that employment in the private sector registered a notable growth in July, albeit below expectations, increasing by 218,000 jobs, after jumping 281,000 jobs in June. However, it fell short of estimates for an increase of 230,000 jobs.
Meanwhile, the Federal Reserve will reduce its asset purchases by another $10 billion, cutting its monthly asset buying program to $25 billion, in line to wind down its bond buying plan with a $15 billion purchase in October.
The U.S. Federal Reserve said it would make further cuts to its monetary stimulus as expected. At the current pace of cutbacks, the Fed`s bond purchases will end in October.
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.