European stock markets advanced yesterday, taking their lead from firmer prices on Wall Street, as well as a stronger showing across much of Asia, as investors turn their attention to the upcoming fourth-quarter earnings season later this week. “Equities are higher, albeit off their best levels and still close to recent record highs,” said Accendo Markets analysts in a note to investors. Oanda analyst Craig Erlam felt that markets were entering “wait and see mode ahead of the start of the earnings season.”
A visitor walks past an illuminated rotating cube displaying share prices in the atrium of the London Stock Exchange Group offices in Paternoster Square. London’s benchmark FTSE 100 index closed 0.5% up at 7,731.02 points yesterday.
With the first corporate earnings reports expected from Friday and an absence of notable economic events at the start of the week, a note of caution could start to creep in, Erlam said. “Equity markets in the US are trading at record highs and with high expectations for earnings season already baked in, there may be an element of caution among investors who will be eagerly anticipating the first batch of results.”
At the end of trading in Europe, London’s benchmark FTSE 100 index was up 0.5% at 7,731.02 points compared with the close on Monday. “Once again the FTSE is flirting with a fresh all-time high, and once again it appears to lack the momentum to truly break through and provide a sequel to its end of 2017 rally,” noted Connor Campbell, analyst at traders Spreadex. Frankfurt’s DAX 30 ended the session 0.1% higher at 13,385.59 points, while the Paris CAC 40 added 0.7% at 5,523.94 points — as data showed unemployment falling to the lowest level for nine years in the single currency area. The EURO STOXX 50 closed 0.2% up at 3,623.00 points.
The EU’s official statistics agency said that the jobless rate in the single currency area fell to 8.7% in November from 8.8% in October, in line with analyst expectations. In Britain, data showed that retailers saw a slowdown in sales over the crucial Christmas trading period, with shoppers squeezed by higher prices and stagnating wages. Retail sales rose 1.4% last month from a year earlier, according to a survey from the British Retail Consortium (BRC) and financial group KPMG.
The dollar steadied against the pound and euro, consolidating its recent mini-rebound with the single currency unable to make inroads despite data showing eurozone economic sentiment at its highest since 2000. However, with US President Donald Trump’s tax cuts already priced in and the European Central Bank expected to begin winding down its stimulus, analysts say the greenback will likely face further pressure from the euro down the line. Oil prices were higher, continuing a positive start to the year driven by unrest in major producer Iran and a depressed economy for fellow Opec member Venezuela.
Sources and photo-credis: Gulf Times