A.B. | ShareCast | 20 Jan, 2013 20:17 - Updated: 21:40 | | |
- Merkels CDU loses elections in Lower Saxony
- Banks deposited 196.4bn euros overnight at ECB
- Richemont down on weakness in Asia Pacific
FTSE-Mibtel 30: 0.07%
Ibex 35: 0.35%
Stoxx 600: 0.05%
The major European equity benchmarks have begun the day slightly lower. That ahead of this evenings meeting of Eurogroup finance ministers and after the unexpected election defeat of German Chancellor Angela Merkels CDU in the state of Lower Saxony.
The SPD/Greens won another state from Merkel's CDU/CSU/FDP coalition, even if only by one seat. Barclays Research does not see the results as affecting policy-making at the federal level. Also to be taken into account, Merkel and her allies in the FDP continue to lead very comfortably in national polls (at 47% versus the SPD/Greens at 38%). Even so, the national elections could still become a tighter race than the latest polls suggest, these economists suggest.
Discussions at todays Eurogroup meeting are expected to include direct bank recapitalization by the European Stability Mechanism (ESM), the aid program for the Spanish banking sector according to analysts and the naming of the groupings new President.
Acting as a backdrop, US markets will remain closed today in observance of the Martin Luther King Holiday. No less relevant, today saw the start of the Bank of Japans two day policy meeting, after which it may unveil aggressive new policy measures at least on the monetary policy side.
Richemont weighs on the Stoxx
Luxury goods maker Richemont today announced that sales in the last quarter of 2012 were flat in the Asia Pacific region, even if that follows on several years of exceptional growth in that area of the world, especially in China. To be had in account are the demanding comparative figures for the same quarter last year. As well, wholesale sales growth was lower than in the first six months and in the comparative period due to the cautious approach taken by the Groups retail partners in Hong Kong and mainland China.
German power producer E.On has asked unions to return to talks.
In the latest edition of Der Spiegel EADS Chief Executive Tom Enders tells the German government that it will not accept interference in the companys decisions on when and where to develop aircraft in the future.
From a sector stand-point the worst performers are personal and household goods (-0.95%), Media (-0.72%) and Automobiles and Parts (-0.24%).
Better than expected economic data
The Dutch consumer confidence index for the month of January improved to -36 points from -39 in the month before (Consensus: -39).
German producer prices fell by 0.3% month-on-month in December (Consensus: 0.0%).
Euro steady despite election results
The euro/dollar is now standing 0.11% lower at 1.3314.
Front month Brent crude futures are now down by 0.233 at 111.62 dollars.
1630:Close UK stocks ended the session slightly lower, failing to partake in the gains seen elsewhere, as investors maintained a wary attitude ahead of Thursday´s Scottish referendum. Rightly so given the enormous significance of the event for Britain. European markets on the other hand were buoyed by China´s decision to inject capital into its five main banks. All of the above came ahead of this evening´s policy statement from the US Federal Reserve. FTSE 100 down 11 to 6,781.
The Federal Open Market Committee (FOMC) continues to believe that it “likely will be appropriate to maintain the current target range for the federal funds rate for a considerable time” after the asset purchase programme ends.
David Cameron will recall the parliament on Monday for an emergency session if Scotland votes for independence in Thursday’s referendum.
Dixons Carphone on Wednesday said it has offered collapsed Phones4U employees 800 jobs at its Currys/PC World stores.
48 people have been killed following government air strikes that bombarded the opposition-held town of Talbiseh, according to a monitoring group on Wednesday.
Scotland’s referendum on independence from the UK will take centre stage on Thursday.
An injection of liquidity into Chinese banks failed to lift UK stocks on Wednesday, as investors treaded cautiously before a policy decision from the Federal Reserve.
The day after recruiter Hydrogen Group published interim results, chief executive Tim Smeaton dipped into the market to top up his holding with 35,000 ordinary shares at a price of 88p.
Eurozone stocks were mostly higher as investors weighed a batch of economic data and showed optimism ahead of the Federal Reserve’s latest policy decision.
Uncertainty continues to surround the outcome of the Scottish independence referendum, as the ‘yes’ campaign looks to be gathering momentum.