European stock markets advanced alongside brighter Eurozone economic data …

European stock markets advanced yesterday alongside brighter eurozone economic data and as Ireland successfully tapped the bond markets for the first time since exiting its EU-IMF bailout.
London’s benchmark FTSE 100 index ended the day up 0.37% to 6,755.45 points, while the CAC 40 in Paris gained 0.83% to 4,262.68 points.
Frankfurt’s DAX 30 index also rose 0.83% to 9,506.20 points, with sentiment helped by upbeat German unemployment data.
On the back of recent encouraging data, Spanish stocks jumped 2.9% to break through the 10,000 level for the first time since last October.
Stocks started off on the right foot after the US Senate confirmed Yellen as the new leader of the Federal Reserve, marking the first time a woman has headed the world’s most powerful central bank.
“Yellen’s confirmation as the head of the US central bank has put the markets at ease,” said David Madden, market analyst at trading firm IG.
“The new chairwoman is a safe pair of hands and, although she will not allow the markets to dictate her policies, she is unlikely to do anything too drastic in the early stages of her leadership.”
US President Barack Obama’s nominee earned bipartisan support and will replace Ben Bernanke, who steps down on January 31 after eight years in the job.
European markets were boosted also by news of stable unemployment in eurozone powerhouse Germany.
The number of people claiming unemployment benefit in Germany increased by 66,640 to 2.873mn in December, official data showed yesterday.
That pushed the unemployment rate ¬– which is the number of people out of work measured against the total of all people in jobs or available for work – up to 6.7% from 6.5% the month before.
However, the increase was solely due to seasonal factors, such as lay-offs during the Christmas period.
Separate data showed that official eurozone inflation eased to 0.8% in December from 0.9% in November.
Meanwhile, Ireland, raised €3.75bn in its first sale of long-term bonds since exiting its EU-IMF bailout last month. The 3.543% yield on the 10-year bonds was lower than that of similar Italian and Spanish bonds on the secondary market.
US stocks pushed higher, helped by a strong November trade report showing the US deficit at its narrowest point in four years.
In midday trading, the Dow Jones Industrial Average was up 0.69% to 16,539.02 points.
The broad-based S&P 500 gained 0.56% to 1,837.08, while the tech-rich Nasdaq Composite climbed 0.86% to 4,149.19.
In foreign exchange activity yesterday, the European single currency eased to $1.3618 from $1.3629 late in New York on Monday. The dollar rose to 104.56 yen against 104.19 yen.
The euro dipped to 82.96 pence from 83.08 pence on Monday. The British pound gained to $1.6413 from $1.6402.
Gold prices fell to $1,227.50 an ounce from $1,246.25 on Monday on the London Bullion Market.
Turkey was again in the spotlight following overnight government action against senior security officials probing corruption, and some analysts warned that the rising tensions may force the central bank to raise its interest rates.
Fitch ratings agency warned: “If the corruption scandal drags on, it could weaken the government and undermine its ability to take timely measures that would maintain economic stability.”
But the Turkish lira and stocks rebounded after Finance Minister Mehmet Simsek downplayed the effect of the political crisis on the economy, saying he said he expects the country to still manage economic growth of 4%.
He also dismissed the need for an interest rate hike, saying measures to limit credit growth would contain the current account deficit.
The lira recovered from a new record low 2.19 lira to the dollar on Monday to 2.16 yesterday. Stocks rose by 0.84%. Gulf Times

Leave a Reply