|
 European shares gained ground, helped in part by forecast-beating
results from bellwethers such as Swiss Life.
The FTSEurofirst 300 index of top European shares was up 0.3
percent, with MSCI's world stock index up 0.2 percent.
The biggest mover in currency markets was sterling, which fell 0.6
percent against the dollar to a 10-week low after the Bank of
England slashed its forecast for wage growth, prompting investors to
push back expectations of when interest rates would rise. [GBP/]
U.S. stocks index futures indicated Wall Street, which eked out
slight gains on Tuesday, would open higher.
Recent market anxiety over the standoff between Russia and Ukraine
ebbed slightly after Polish Foreign Minister Radoslaw Sikorski said
late on Tuesday that the possibility of Russia's military invading
eastern Ukraine had receded after Moscow agreed to send in
humanitarian aid under Red Cross auspices.
However, Ukraine on Wednesday denounced the dispatch of the convoy
and said it would not be allowed in.
Russian shares rose more than 1 percent.
"The market is rangebound for now, with the focus on the tense
situation in Ukraine, as well as on GDP figures for Germany and
France due tomorrow," IG France chief market analyst Alexandre
Baradez said. "There's a lot of confusion about the Russian
humanitarian convoy heading to Ukraine."
OIL SINKS
Brent crude slipped below $103 a barrel to trade at its lowest level
in more than a year as supply continued strong.
September Brent crude futures, which expire on Thursday, fell as low
as $102.37, the weakest for a front-month since July 1, 2013. It was
the fourth day of losses for the benchmark and comes after the
International Energy Agency (IEA) pointed to well-supplied global
markets and a glut in the Atlantic Basin.
Output from the Organization of the Petroleum Exporting Countries
rose to a five-month high of 30.44 million barrels per day (bpd) in
July as increased production from Saudi Arabia and Libya more than
offset declines in Iraq, Iran and Nigeria.
"Brent prices have been in a steady decline and I think the
background of that is that the market is forming the view that any
supply disruptions are not on the immediate horizon," CMC Markets
chief market analyst Ric Spooner said.
But sub-par global economic numbers were also a factor in generally
weak commodity prices. Copper, seen as a barometer of world demand,
fell to a six-week low of $6,926.50 per tonne on Wednesday.
[to top of second column] |
ASIA CHILL
Asian shares made modest gains, even though mainland Chinese shares
were knocked off their highs by surprisingly weak loans data. Data
also showed Japan's economy shrank an annualised 6.8 percent from
the previous quarter - the biggest contraction in three years - but
the outcome was slightly better forecast.
German government bond yields held close to record lows on
Wednesday, with a 10-year debt auction suggesting strong underlying
demand for German paper due to a uncertain economic outlook and
rising expectations the European Central Bank would further ease
monetary policy.
German inflation for July was confirmed at 0.8 percent year-on-year,
showing how weak inflationary pressures are even in the region's
strongest economy.
Euro zone industrial output unexpectedly dropped in June, falling
0.3 percent compared with May and second-quarter gross domestic
product reports from across the region are due on Thursday.
German 10-year yields rose 1 basis point to 1.07 percent, having hit
a record low of 1.02 percent last week.
"The recovery in the euro zone is pretty weak and we also see the
effect of geopolitical fears in the market," DZ Bank rate strategist
Christian Lenk said.
Sterling fell as low as $1.6703 and the euro firmed to above 80
pence for the first time in six weeks.
The BoE, in its quarterly inflation report, cut in half its forecast
for wage growth this year to 1.25 percent and said the pay data
would help determine when interest rates would rise.
Earlier, figures showed wages fell 0.2 percent in the second quarter
compared with the same period in 2013.
Markets pushed back their expectations of when rates would rise to
next February 2015 from December.
(Additonal reporting by Blaise Robinson in Paris, Anirban Nag and
Nigel Stephenson in London, Seng Li Peng in Singapore, Hideyuki Sano
and Lisa Twaronite in Tokyo; Editing by Raissa Kasolowsky)
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