adminLONDON. — European stock markets rose yesterday, extending the previous day’s gains, as traders reacted to mixed French data and focused on a US budget row and its implications for Federal Reserve stimulus, analysts said.
Airbus was in focus for a second day running as three companies in China together ordered 68 of the European planemaker’s single-aisle A320 aircraft amid rising air travel in the world’s most populous country.
Britain’s energy sector slid into the red, a day after the country’s opposition Labour leader Ed Miliband promised a freeze on electricity and gas prices should his party win the next general election in 2015.
London’s benchmark FTSE 100 index rose 0,23 percent to stand at 6 586,54 points in morning trade.
Frankfurt’s DAX 30 edged up 0,07 percent to 8 671,00 points and the CAC 40 in Paris won 0,06 percent to 4 198,32.
French managers are increasingly upbeat on the country’s business climate but are still less optimistic than in the past, particularly in the manufacturing sector, new data showed yesterday.
The latest figures from national statistics institute INSEE showed France’s business climate index rose to 94 in September, up three points from August but still below its long-term average of 100.
Markets meanwhile looked to the United States for short-term direction.
“Over the next three weeks or so, US lawmakers will be battling it out to find a viable solution to raise the debt ceiling. But, as we have seen time and time again, markets are of the view that lawmakers will find another patch make-shift solution which kicks the can further down the road,” said Ishaq Siddiqi, analyst at ETX Capital traders.
“If lawmakers fail to drum up a viable plan to raise the debt ceiling, it will be highly likely the Fed will refrain from tapering QE (the quantitative easing stimulus programme) at least until December.”
In foreign exchange deals, the European single currency gained to US$1,3497 from US$1,3469 late in New York on Tuesday. The dollar fell to 98,48 yen from 98,74.
Sterling slipped to US$1,5991 from US$1,6001 on Tuesday, and to 84,40 pence against the euro from 84,17.
On the London Bullion Market, the price of gold advanced to US$1 322,11 an ounce from US$1 314,25 on Tuesday.
Shares in Airbus parent group EADS climbed 0,73 percent to 46,43 euros. Airbus said aircraft-leasing firm BOC Aviation had ordered 25 of its planes, Qingdao Airlines 23 and Zhejiang Loong Airlines 20.
Airbus on Tuesday predicted that the world would need more than 29 000 new commercial planes from manufacturers over the next 20 years to respond to higher traffic, particularly in emerging markets like Brazil, China and India, and to replace older models.
Elsewhere yesterday, shares in British energy group Centrica shed 3,36 percent to 383,37 pence and rival SSE lost 2,93 percent to 1 533,64 pence.
“Labour’s return to voter-friendly policies at the cost of businesses has resulted in all the major power-supplying utilities being thumped . . . as the party announced proposed caps on energy price rises for 20 months, should it win the next general election,” said Alastair McCaig, market analyst at traders IG.
Asian stock markets mostly closed lower yesterday after losses across Wall Street that came amid political tensions over the US budget and debt ceiling. With the deadline for a new budget agreement next Monday, investors are anxious that lawmakers on Capitol Hill reach an agreement that will avoid a shutdown of parts of the US economy.
However, with Republicans calling for cuts to President Barack Obama’s healthcare law in the budget before they agree to any lifting of the country’s borrowing limit, investors are preparing for a painful standoff.
Global stock markets have been choppy since last Thursday’s rallies following the US Federal Reserve’s surprise decision to maintain the level of its massive stimulus programme, under which it buys US$85 billion a month in bonds. — AFP.
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