You are here

Europe: World stocks muted before Yellen speech


[LONDON] Major stock markets were patchy and indecisive on Tuesday, with investors cautiously awaiting a key speech by US Federal Reserve chief Janet Yellen on the first trading day after a long holiday weekend.

Asian markets mostly retreated after a similar pause in trading.

At the European close, London's benchmark FTSE 100 index was flat after a volatile session while, in the eurozone, the Frankfurt's DAX 30 closed slightly firmer after a see-saw session, helped by a modest rebound on Wall Street.

Volkswagen shares dropped 1.6 per cent to 113.05 euros after the US government filed a suit against the German automaker, charging it deceived American consumers by promoting supposedly "clean diesel" vehicles that were actually fitted with illegal pollution-cheating devices.

Market voices on:

The Paris CAC 40 posted a more solid 0.9 per cent rise at the close.

On Wall Street, the Dow Jones index was down 0.2 per cent by the time of the European close as weak oil prices weighed on sentiment, but off opening lows.

Petroleum producers Chevron and ConocoPhillips fell as US oil prices fell nearly three per cent.

Yahoo advanced after The Wall Street Journal reported that Yahoo had set an April 11 deadline for bids on its core Internet assets.

But mostly, investor eyes were on Yellen in the hope that she will shed some light on the Fed's thinking about its interest rate policy in her speech Tuesday in New York.

"Fed Chair Janet Yellen's speech later today will, of course, be keenly watched for hints on the outlook for US interest rates," analysts at Capital Economics said, adding that markets now expected the Fed chief to lean more towards higher rates than at the time of the Fed's last public statement earlier this month.

A recent series of strong US data - including better-than-forecast fourth-quarter growth - raised the prospect of a lift sometime soon, although disappointing inflation and consumer spending figures have fuelled opposing expectations.

In the eurozone, the ECB has launched a raft of policy measures to get credit flowing, including a massive programme to buy public sector bonds to pump liquidity into the system.

ECB data Tuesday showed that loans to the private sector in the euro area grew faster in February than the previous month.

Also on the agenda this week is the release Friday of a US jobs report that will give further insight into the state of the world's top economy.