(MENAFN- AFP) European shares drifted on Monday, awaiting political signals about Britain's EU exit, while Asian stocks added to their rally on hopes of another stimulus jolt for economies already on central bank life support.
The FTSE 100 index dipped 0.2 in early afternoon trading in London, getting little traction from a report in the Financial Times that British finance minister George Osborne plans to slash corporation tax by over five percentage points to under 15 percent to tempt businesses to stay following the country's shock vote to leave the European Union.
In Frankfurt the DAX 30 shed 0.4 percent and in Paris the CAC 40 dropped 0.5 percent.
"Brexit will remain the dominant story in the markets again this week with investors remaining somewhat in limbo over the future of the UK's relationship with the EU," said Craig Erlam, senior market analyst at Oanda trading group.
But following abrupt early selling following the referendum, the market's view on unfolding events has shifted somewhat, said analysts at Barclays Bourse in Paris.
"Investors have decided to focus on a favourable short-term scenario despite Brexit," they said in a note to clients.
"Either Brexit happens and in that case central banks will act to calm things down, or Brexit is postponed or cancelled," they summed up current thinking in dealing rooms.
While the start of the week is looking relatively quiet, with the US markets closed on Monday in celebration of Independence Day, the rest of the week is likely to be anything other than dull.
Investors are awaiting the release Wednesday of minutes from the Federal Reserve's most recent policy meeting to see if it sheds any light on its plans for interest rates, while US June jobs data is due on Friday.
The FTSE was getting a boost from the commodities market.
"Mining stocks have continued to make gains in the last 24 hours with precious metals miners feeling the tail wind of a move higher in silver and gold prices," said Michael Hewson, chief market analyst at CMC Markets.
The prospect of lower interest rates sticking around for longer as central banks continue to prop up markets and economies was also benefitting shares in mining companies, which often carry large amounts of debt.
Fresnillo led the gainers with a jump of 6.0 percent followed by Glencore at 4.0 percent.
The Italian banking sector, which is weighed down by a mountain of non-performing loans and has seen a plunge in share values that makes it even more difficult to for them to remain viable, is casting a shadow over markets.
Milan's FTSE-Mib index was down 1.0 percent, with shares in troubled Monte Di Paschi bank falling around 9 percent.
- 'Uncertainty' -
Asian stocks pushed higher again Monday, building on last week's rally.
Tokyo rose 0.6 percent -- marking a sixth-straight gain -- Hong Kong climbed 1.3 percent in the afternoon and Shanghai added 1.9 percent by the close. Seoul added 0.4 percent.
Sydney rose 0.7 percent, despite the weekend's general election producing no clear winner raising the prospect of a hung parliament.
With votes still being counted, Prime Minister Malcolm Turnbull said the final result might not be known for several days, while Standard & Poor's warned the uncertainty could lead to the country's top-class AAA rating being cut.
South Korea's promise of $17 billion in stimulus last week came as dealers speculate that Japan will bolster its own multi-billion-dollar programme, while the chances of the US raising interest rates this year have all but evaporated.
On Thursday, Bank of England boss Mark Carney became the latest to provide assurances, indicating policymakers could embark on fresh monetary easing -- and possibly cut rates.
"While the potential for increased liquidity from central banks has helped calm stock markets, there's still a lot of uncertainty out there," Nicholas Teo, a trading strategist at KGI Fraser Securities in Singapore, told Bloomberg News.
The pound dipped against the dollar Monday to $1.3265, but was still far off the 31-year low of $1.3121 it touched at the start of last week.
- Key figures around 1115 GMT -
London - FTSE 100: DOWN 0.2 percent at 6,564.31 points
Frankfurt - DAX 30: DOWN 0.4 percent 9,741.94
Paris - CAC 40: DOWN 0.5 percent at 4,254.70
Tokyo - Nikkei 225: UP 0.6 percent at 15,775.80 (close)
Hong Kong - Hang Seng: UP 1.3 percent at 21,059.20 (close)
Shanghai - Composite: UP 1.9 percent at 2,988.60 (close)
Pound/dollar: DOWN at $1.3265 from $1.3267 Friday
Euro/dollar: DOWN at $1.1126 from $1.1138
Dollar/yen: UP at 102.61 yen from 102.52 yen
New York - DOW: UP 0.1 percent at 17,949.37 (close)
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.