Sponsored by: Investment Center

Something new in your business?  Click here to submit your business press release

Chamber Corner | Main Street News | Job Hunt | Classifieds | Calendar | Illinois Lottery 

European markets open higher amid rate cut hopes

Send a link to a friend

[November 03, 2008]  LONDON (AP) -- Europe's stock markets opened modestly higher Monday after solid gains in Asia overnight and amid mounting expectations that the European Central Bank and the Bank of England will aggressively cut borrowing costs this week.

The FTSE 100 index of leading British shares was 19.95 points, or 0.5 percent, higher at 4,397.29, with mining stocks doing particularly well on higher commodity prices. BHP Billiton PLC and Anglo American PLC were up 3.8 percent and 2.2 percent respectively.

HardwareFrance's CAC-40 was up 28.04 points, or 0.8 percent, at 3,515.11, boosted by a 2.5 percent rise in Societe Generale, which reported in-line third quarter profit and said it was strong enough "to weather a potential deterioration in the economic environment of 2009."

Germany's DAX was the best performing major European index, up 64.60 points, or 1.3 percent, at 5,052.57, boosted by a 5.2 percent rise in Deutsche Bank AG, which said it is strong enough not to ask for funds from the German government's 500 billion euro ($637 billion) rescue package.

Also helping sentiment was the bright finish on Wall Street Friday, where the Dow Jones index of leading U.S. shares closed 144.32 points, or 1.6 percent, up at 9,325.01 on a combination of pension fund buying at the month-end and a modicum of bargain hunting.

"The fact all the main U.S. indices finished in positive territory is certainly going to help set the pace this morning, as will the fact Asian markets got off to an upbeat start too," said Matt Buckland, a dealer at CMC Markets.

"But until we see further fundamentals start to back up these recent gains then the risk of some opportunistic profit taking shouldn't be overlooked either," he added.

Pharmacy

There's a raft of economic news this week to occupy traders' attention, most notably interest rate decisions from the European Central Bank and the Bank of England. Both banks are expected to reduce their benchmark rates by a half-percentage point to 3.25 percent and 4.00 percent respectively but there is rising speculation that the Bank of England may decide to cut by a full percentage point.

"The risks are skewed towards a larger cut, particularly given that at these levels interest rates are still too high, in our view, for current economic and financial conditions," said George Buckley, chief UK economist at Deutsche Bank.

Investors will also keep an eye on U.S. reports due on manufacturing, the service sector and employment in the world's largest economy.

Wall Street's positive tone is also expected to continue into the new week, which will be domininated by Tuesday's U.S. presidential election.

U.S. stock index futures were up modestly, suggesting that Wall Street would open higher. The Dow Jones industrial average added 144.32, or 1.6 percent, to close Friday at 9,325.01. Dow futures were up 0.6 percent, while S&P futures were up 0.5 percent.

[to top of second column]

Investments

Europe's gains follow Asia's advances overnight, though Japan was closed for a public holiday.

Hong Kong's blue-chip Hang Seng Index climbed 375.70, or 2.7 percent, to 14,344.37 but closed well off its session highs, while South Korea's main stock market added 1.4 percent after the government unveiled nearly $11 billion in new spending measures to prevent the economy from sliding into recession.

In Australia, the S&P/ASX 200 closed up more than 5 percent -- its best performance in almost two weeks -- despite troubling evidence of slowing manufacturing and retail sales, as traders anticipated a further interest rate cut from the country's central bank on Tuesday.

India's main stock index rose 3.5 percent after a central bank decision over the weekend to cut the nation's key interest rate and release $8.1 billion into its financial system.

Shanghai's benchmark, though, erased early gains to trade in negative territory amid reports suggesting Chinese manufacturing, the engine behind the country's phenomenal growth, was contracting. The index closed down 0.5 percent.

Oil prices sank after gaining in the day, losing $1.09 to $66.72 a barrel.

On the currency front, the dollar was up 0.7 percent at 99.24 yen, while the euro was up the same amount at $1.2824.

[Associated Press; By PAN PYLAS]

AP Business Writer Jeremiah Marquez in Hong Kong contributed to this report.

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Funeral Directors

Investments

< Recent articles

Back to top


 

News | Sports | Business | Rural Review | Teaching & Learning | Home and Family | Tourism | Obituaries

Community | Perspectives | Law & Courts | Leisure Time | Spiritual Life | Health & Fitness | Teen Scene
Calendar | Letters to the Editor