LONDON: European stock markets rose yesterday, with a G7 countries warning of foreign exchange volatility pushing up the yen, while dealers also digested news of job cuts across the banking, airlines and telecoms sectors.
US stocks edged higher yesterday as markets awaited President Barack Obama’s State of the Union address, expecting him to outline the economic priorities for his second term.
After an hour of trade, the Dow Jones Industrial Average was up 22.65 points (0.16 percent) at 13,993.89. The S&P 500 index rose 1.39 point (0.09 percent) to 1,518.40, while the tech-rich Nasdaq Composite added 1.70 (0.05 percent) at 3,193.70.
Investors will be watching Obama’s nationally televised speech to gauge “content and tone as a guide for assessing the likelihood of avoiding sequestration slated to go into effect March 1,” said Patrick O’Hare of Briefing.com.
London’s FTSE 100 index of leading companies rose 0.98 percent to close at 6,338.38 points, while Frankfurt’s DAX 30 added 0.35 percent to 7,660.19 points and in Paris the CAC 40 climbed 0.99 percent to 3,686.58 points.
Markets shrugged off a defiant North Korea staging its most powerful nuclear test yet and warning of “stronger” action to follow if the ensuing wave of global condemnation translated into tougher sanctions.
However a warning by the Group of Seven top industrialised nations amid growing rumblings of a “currency war” sent the yen climbing.
Japan’s recent monetary easing which has pushed down the yen, has stoked fears, especially in Europe, of a so-called “currency war” between the major economies as policymakers seek to devalue their currencies to make exports more competitive.
The yen strengthened against both the dollar and euro.
It took 93.11 yen to buy a dollar in London deals compared to 94.33 late on Monday.
It took 125.25 yen to buy a euro compared to 126.42 on Monday. The European single currency stood at $1.3450 compared with $1.3404 late in New York on Monday.
Meanwhile gold prices fell to $1,647.50 an ounce from $1,652 in trading on Monday on the London Bullion Market. Shares in Barclays bank were the top performer in London, surged 8.57 percent to 327.35 pence, topping London’s FTSE 100.
Shares in International Airlines Group rose 2.6 percent to 221.8 pence after it announced plans to cut 3,800 jobs at Iberia airline, about 700 fewer than it had planned in November. In Paris, France Telecom shares fell 0.67 percent to 7.83 euros after Orange Poland, which it controls, said it would axe 1,700 this year.
Asian stock markets closed mixed in holiday-thinned trade, with Tokyo boosted by a weaker yen, while Seoul was lower after news that North Korea had successfully tested a nuclear bomb.
With several Asian markets still closed for Lunar New Year celebrations, trading was quiet, while dealers look ahead to a meeting of the Group of 20 top economic power at the end of the week.
AFP
