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Thursday, December 8, 2016

European Stocks End Lower As Markets Await U.S. Stimulus Clues

LONDON (AFP) – Europe’s main stock markets finished in the red on Monday amid low trading volumes as investors awaited further indications on when the Federal Reserve plans to reduce its huge stimulus program.

London’s FTSE 100 index of leading shares lost 0.53 percent to close at 6,465.73 points and Frankfurt’s DAX 30 dipped 0.31 percent to end at 8,366.29 points.

In Paris, the CAC 40 in Paris fell 0.97 percent to 4,083.98 points.

“It appears that everyone in the city is still either asleep or on holiday with low trading volumes and a blank macro calendar unlikely to stir anyone into action in the short term as we all wait for Wednesday’s Fed minutes and any clues on the potential scale of the tapering plan that the market now seems convinced will begin in September,” CMC Markets UK trader Ankit Kapur said.

In foreign exchange trading, the euro stood at $1.3348 compared with $1.3326 late in New York on Friday, with the European single currency holding firm following last week’s figures showing some economic life returning to the eurozone.

The dollar rose to 97.95 yen from 97.53 yen and sterling strengthened against the euro at 85.21 pence as well as against the U.S. dollar, coming in at $1.5665.

India’s rupee plunged to a new low against the dollar and its main stocks index slid further on Monday even as the World Bank’s chief economist said the country’s economic problems were “overplayed.”

On the London Bullion Market, the price of gold increased to $1,365 an ounce from $1,369.25 on Friday.

In company news, Austrian oil and gas giant OMV is buying North Sea oil and gas assets from Norwegian group Statoil for $2.65 billion (1.99 billion euros), the two companies announced.

In reaction, OMV shares fell 2.20 percent to 34.33 euros, while Statoil’s shares rose 0.8 percent to 129.60 Norwegian kroner (16.43 euros, $21.89).

Shares in Swedish industrial group Atlas Copco rose 1.6 percent to 164.10 Swedish kronor (18.89 euros, $25.17) after announcing it was acquiring British pump and vacuum engineering specialist Edwards for $1.6 billion.

France’s Lafarge, the world’s biggest cement maker, in contrast saw its shares drop 4.2 percent to close at 47.25 euros after saying that it has not yet pulled its foreign workers out of Egypt.

Clashes between Egyptian security forces and supporters of ousted president Mohamed Morsi have killed hundreds in the past week.

Asian stock markets meanwhile traded mixed on Monday following a weak lead from Wall Street before the weekend, as traders erred on the side of caution on expectations that the U.S. Fed would soon begin reeling in its stimulus program.

In midday trade on Monday, U.S. stocks were mixed.

The Dow Jones Industrial Average fell 0.09 percent, the broad-based S&P 500 slipped 0.02 percent, while the tech-rich Nasdaq Composite Index rose 0.46 percent.

On Friday, they ended lower, bringing a close to one of Wall Street’s worst weeks of 2013, as a consumer confidence report showed weaker sentiment in August than July while retailers also reported poor earnings.

While the latest economic figures out of Washington were soft, investors fear the U.S. central bank will begin to wind down the $85 billion a month bond-buying scheme that has supported global markets for almost a year.

Expectations for tapering as early as September sent yields on US, German and British government bonds to their highest levels this year on Monday, traders said.

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