Global stocks drift despite European growth
AP and AFPBANGKOK/HONG KONG--Good news from two of Europe's biggest economies failed to shake global stock markets out of their lethargy Wednesday.
August 15, 2013, 12:07 am TWN
Germany's economy grew 0.7 percent in the April-June quarter compared with the previous three-month period. France posted better-than-expected quarterly growth following two quarters of contraction, and thus by definition, exited recession. The country's GDP rose 0.5 percent in the second quarter, soundly beating expectations of 0.1 percent.
Britain's FTSE 100 fell 0.4 percent to 6,584.58. Germany's DAX was marginally higher at 8,417.62. France's CAC-40 rose 0.1 percent to 4,096.94. Wall Street futures waned, with Dow Jones industrial futures heading 0.2 percent lower. S&P 500 futures fell 0.2 percent to 1,687.
The combined economy of the 17 countries that use the euro is expected to show growth for the second quarter at 0.2 percent, reversing a contraction in the first quarter.
In Asia markets were mixed Wednesday following gains on Wall Street, as investors awaited fresh numbers that will give an indication of the health of the U.S. economy.
Tokyo shares closed up 1.32 percent, or 183.16 points, at 14,050.16 due to bargain-hunting in late trading and with a weak yen continuing to support the bourse.
Seoul closed up 0.57 percent, or 10.88 points, at 1,923.91. Sydney closed flat at 5,157.4 after a choppy session in which Commonwealth Bank shares fell despite posting the biggest-ever profit by an Australian bank.
Shanghai finished down 0.29 percent, or 6.02 points, to 2,100.14, reversing earlier gains as worries resurfaced over the domestic economy. Trading on the Hong Kong stock exchange was suspended for the day following disruption caused by Typhoon Utor.
Dealers cited improved economic data in the U.S., Europe and China for buoying investor sentiment, along with a Japanese media report saying that Tokyo was mulling corporate tax cuts to help offset an expected rise in sales tax.
Investors are closely watching a series of data releases due this week from the United States, the world's biggest economy. On Tuesday, retail figures showed a lower-than-expected 0.2-percent rise but some analysts pointed to overall strength in non-automobile purchases.
Retail sales are closely watched because consumer spending accounts for 70 percent of U.S. economic activity. Figures for housing and industrial production are expected later in the week.
The figures could have an impact on expectations of when the Fed will start to reduce its monetary stimulus. Most economists think that so-called tapering will start as soon as next month.
Atlanta Fed President Dennis Lockhart said Tuesday that it was too early to say when the bank would ease back on its stimulus, but hinted that it would likely happen before the end of the year.
Wednesday's rise in Tokyo mirrored gains in the United States, after a U.S. Federal Reserve official stressed that the Fed's expected tapering of its massive US$85 billion-a-month stimulus program would be cautious.
The American market was also buoyed after corporate raider Carl Icahn revealed he has a large stake in Apple, sending the technology titan 4.8 percent higher.
The billionaire activist took to Twitter to disclose his “large” stake in the company, which he rated “extremely undervalued”.
Analysts said investors would look for clues from the Fed when they meet next month.
The Fed's next policy meeting is Sept. 17-18.
Gold was at US$1,325.43 an ounce at 1100 GMT compared with US$1,319.88 late Monday.