European stocks drop

London’s FTSE 100 index of leading shares dropped 0,55 percent to 6 520,17 points in late morning deals.

Frankfurt’s DAX 30 slid 0,61 percent to 8 151,43 points and in Paris the CAC 40 decreased 0,56 percent to 3 829,22.
Later yesterday, all eyes were on Bernanke for what he had to say about the future of the Fed’s stimulus scheme during a congressional hearing.

Bernanke will give his semi-annual testimony over two days in Washington, with investors eager for clues about the Fed’s view of the US economy and its plans on when to taper its US$85 billion-a-month bond-buying scheme.

“The focus will now shift to the US, for Fed chairman Ben Bernanke’s testimony in front of the House Financial Services Committee,” said analyst Craig Erlam at traders Alpari.
“There’s likely to be plenty of volatility in the markets around this speech. I’m not necessarily expecting too many surprises here from Bernanke, just potentially more clarity on the timetable for tapering.”

In foreign exchange deals yesterday, the European single currency dipped to US$1 3151 from US$1 3164 late in New York on Tuesday.
And the price of gold fell to US$1 284,25 an ounce from US$1 291,50 on Tuesday on the London Bullion Market.

In Paris, shares in airline Air France-KLM fell 6,11 percent to 6,16 euros after analysts at Morgan Stanley bank lowered their target for the share price.
And shares in giant French cosmetics group L’Oreal fell by 2,87 percent after the firm reported 4,7 percent rise in first-half sales which disappointed investors.

Asian equity markets meanwhile traded mixed as caution set in before Bernanke, who said recently that the US central bank would maintain its growth-oriented policies for the foreseeable future.

Profit-taking kept stocks in check following two days of broad gains. Hong Kong shares gained 0,28 percent, Tokyo added 0,11 percent and Seoul rose 1,13 percent.
But Shanghai ended 1,0 percent lower and Sydney finished on a flat note. Also in the sights is a meeting of G20 finance ministers today and tomorrow in Moscow, where officials are expected to discuss the Fed’s stimulus, while Japan will hold Upper House elections at the weekend.

Prime Minister Shinzo Abe’s Liberal Democratic Party is tipped to win the majority of the 121 seats up for grabs, giving him control of both chambers and the ability to push on with his aggressive monetary policy drive.

Wall Street provided a negative lead as profit-taking set in after the Dow and S&P 500 broke to new record highs for three consecutive sessions. The Dow fell 0,21 percent and the S&P 500 gave up 0,37 percent. The Nasdaq shed 0,25 percent. – AFP.