LONDON (AP) – European stock markets dipped Thursday while the euro struck two-week highs against the dollar after the European Central Bank left its key interest rates unchanged and decided against extending the duration of its bond-buying stimulus program.
Advertisement
Attention now turns to ECB President Mario Draghi’s 1230 GMT news conference, where he will unveil fresh economic forecasts and will likely offer clues about the bank’s future course. The ECB also refrained from making any tweaks to its massive asset-buying programme to encourage lending and reinvigorate growth, which has seen it purchase over a trillion euros in government and corporate bonds over the past 18 months.
Japan’s TOPIX seesawed from a gain of as much as 0.3 percent to a drop of 0.4 percent before closing 0.2 percent lower on Friday, as investors digested news on North Korea and the ECB’s policy decision.
Having already risen on Thursday, yields on Germany’s 10-year Bunds DE10YT=TWEB , the euro zone’s benchmark bond, rose 2.6 basis points to minus 0.034 percent.
Outside of the blue chips, pub chain operator J.D. Wetherspoon rose 4.3 percent after reporting better-than-expected results.
In commodities, the market focus was on oil prices and the EIA report on crude oil inventories. Shares in HP Enterprise slid 48 cents, or 2.2 percent, to $21.61, while Intel shed 30 cents, or 0.8 percent, to $36.15. USA shares were set to drop at the open too, with Dow futures and the broader S&P 500 futures down 0.4 percent.
Hong Kong .HSI was the sole gainer among major Asia ex-Japan markets, with shares up 1.4 percent, extending their weekly advance to 4.2 percent, the most in nearly two months.
The paper estimates that increasing the average maturity of the bonds owned by the European Central Bank to 11 years would increase inflation at its peak by 50 basis points and GDP by 1.4 percent, compared with 40 basis points and 1.1 percent respectively with an average maturity of eight years. Whitecap Resources Inc. and Encana Corp. increased at least 4.3 per cent. Materials fell 0.4%, with metals and mining shares ending 1% lower.
The uptick in bond yields was also partly driven by a four-percent surge in oil prices on Thursday to two-week highs, after slump in US Gulf Coast imports to a record low led to surprisingly huge drawdown in US crude stocks.
Growth in the region slowed to 0.3 per cent in the second quarter after the economy expanded 0.5 per cent in the three months through March. Hong Kong’s Hang Seng was up 0.5 percent to 24,026.89, while the Shanghai Composite slipped almost 0.2 percent to 3,090.58. India’s S&P BSE SENSEX slipped 0.5 percent. Japan’s Nikkei 225 index fell 0.3 per cent. US gold futures rose 0.2 percent to $1,351.70.
Brent crude (LCOc1) settled up 4.2 percent at $49.99 and USA crude settled last up 4.7 percent at $47.62, marking the highest level since August 26 for both.
US bond yields also hovered around their highs of the week, with the 10-year bond yield rising to 1.6210 per cent.
Advertisement
The euro extended gains against the dollar to $1.1273, while the greenback was otherwise flat.
