You are here

Europe: Stocks wobble as ECB and Opec disappoint


[LONDON] Europe's main stock indices marked time on Thursday as key meetings of the ECB and OPEC in Vienna failed to deliver any news to catalyse markets mired in caution.

London's benchmark FTSE 100 index ended the day down 0.1 per cent and the CAC 40 in Paris shed 0.2 per cent. However Frankfurt's DAX 30 managed a meagre gain of 0.03 per cent.

In foreign exchange, the euro slid to US$1.1157 from Wednesday's level of US$1.1187 as the ECB, as expected, held fire on monetary policy at its meeting in the Austrian capital.

However, after months of fighting the threat of deflation in the single currency area, the central bank marginally upgraded its inflation forecasts.

"European markets found little encouragement ... from today's ECB meeting as it became apparent that the governing council were content to play a watching brief" as its new programmes to buy corporate bonds launches next week and targeted lending to banks on June 22, said markets analyst Michael Hewson at CMC Markets.

Your feedback is important to us

Tell us what you think. Email us at

While ECB chief Mario Draghi promised to ease monetary policy further if necessary, "market participants seemed ill at ease at the idea of a slow pick up in growth and inflation in the eurozone," said Yoav Nizard at FXCM currency trading house.

Also in Vienna on Thursday, Opec failed to agree on a production ceiling as Saudi Arabia expressed confidence that oil prices will keep recovering.

"Everybody is very satisfied with the market. The market is rebalancing as we speak," said Khaled al-Falih, newly appointed as energy minister by the kingdom's powerful and dynamic new crown prince.

Shares in oil companies retreated, with BP down 0.1 per cent and Shell's A share shedding 0.3 per cent in London. Total shares fell 1.6 per cent in Paris.

US stocks also headed lower Thursday, with the Dow shedding 0.2 per cent in late morning trading.

Meanwhile US jobless claims, a sign of the pace of layoffs, moved lower and the ADP private-sector jobs report showed an increase of 173,000 positions created in May.

Crucial non-farm payrolls data from the US Labour Department are to be released on Friday, one of the last pieces of the puzzle that could sway the decision of the US Federal Reserve to raise interest rates again later the month or wait to July.

In Asian trading hours, the yen strengthened further on worries about the global economy and Japanese stimulus.

Japanese Prime Minister Shinzo Abe on Wednesday said he would put back by more than two years a planned sales tax increase that threatened the country's torpid economy.

However, while the move would give the government and central bank breathing room to kickstart growth, he failed to come up with any detailed plans to do so, while analysts said the delay had dampened any chance of any near-term stimulus measures.

The stronger currency hit Japan's Nikkei index as exporters sank, with the bourse down 2.3 per cent by the close.

Investors are also scooping up the yen, seen as a haven investment, on uncertainty ahead of Britain's referendum this month on EU membership.

The pound, which fell heavily against rivals on Wednesday after polls showed increased support for Britain to leave the 28-country bloc, recovered in trading on Thursday.


BT is now on Telegram!

For daily updates on weekdays and specially selected content for the weekend. Subscribe to