The pan-European FTSEurofirst 300 index .FTEU3 ended down 1.2 percent, as commodity-linked names fell.
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“Despite these intimations by the Fed, the market continues to remain skeptical over the likelihood of a rate hike in June or July”, Angus Nicholson, a market analyst in Melbourne at IG Ltd., said in an e-mail to clients.
Holding in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose 0.5% to 860.34 tonnes on Thursday, the highest since November 2013.
Sembcorp Marine dropped 5.5 cents or 3.43 per cent to $1.55, and Keppel Corp shed 14 cents or 2.61 per cent to $5.22.
However, while the Fed’s vice chairman, Stanley Fischer, today said the U.S. needed faster potential economic growth in order to lift the long-run equilibrium interest rate, he stayed quiet on the matter of a June rate rise.
Expectations that the next hike in U.S. interest rates could take place in the summer are reasonable, New York Federal Reserve President William Dudley said Thursday, joining the chorus of voices predicting a June-July tightening.
Meanwhile, the Conference Board said its index of leading economic indicators climbed by 0.6 percent in April compared to economist estimates for a 0.4 percent increase.
“Traders will now keep a keen lookout for United States economic data after the latest FOMC minutes suggest a skewed bias for a rate hike in June if data points in the second quarter improve”, NetResearch Asia said in a note yesterday.
U.S. Treasury prices rose, rebounding from Wednesday’s selloff. The Nasdaq composite fell 53 points, or 1.1 percent, to 4,686.
A Labor Department report yesterday showed filings for USA unemployment benefits declined last week from a more than one-year peak, although they still came in higher than economists had estimated.
Gold was put under extensive pressure as minutes of the Fed’s April meeting, released on Wednesday, showed that most regulators thought a June rate hike was appropriate, given continued improvement in the USA economy.
Monsanto rose $3.42, or 3.5 percent, to $100.55 after German drug and chemicals company Bayer confirmed it has entered talks with the USA -based seed company. In Europe, the key bourses in London, Frankfurt and Paris were down between 0.8 and 1.3 per cent in mid-afternoon trade.
The dollar is on track to extend a steady rise against its main rivals for a third straight week on Friday. Futures on Hong Kong’s Hang Seng Index declined 0.6 percent with contracts on the Hang Seng China Enterprises Index in most recent trading, while FTSE China A50 Index futures were down 0.3 percent.
The Fed had last signalled its belief that risks were balanced in December, when it hiked rates for the first time in almost a decade, raising them from record lows near zero to between 0.25 per cent and 0.5 per cent.
Benchmark U.S. crude oil fell 3 cents to close $48.16 a barrel in NY. Safe-haven gold dropped to $1251.90 an ounce, with copper and silver fading alongside softer crude oil prices. The yield on the 10-year Treasury note fell to 1.84 percent from 1.86 percent.
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The dollar turned lower against the yen and was last down 0.26 percent against the Japanese currency, at 109.88 yen JPY=, after touching a three-week high against the yen of 110.37 yen.
