Wednesday, October 27, 2021

Mixed finish for European markets

By Kamelia Angelova, CNN

European stock markets finished Thursday mixed, as companies trading in Germany joined other global markets in benefiting from the lowering of economic uncertainties that trade protectionism has created.

The trade uncertainty has been felt through most of the year, but risks posed by the border dispute between the United States and China are finally diminishing.

“This uncertainty seems to be less of a threat as there is some indication that this can be settled in the near term,” CMC Markets analysts said in a note Thursday.

The French CAC 40 index ended flat and the Italian FTSE MIB fell nearly 1%.

Meanwhile, the FTSE 100 in London jumped 0.6%, boosted by cost-cutting measures put in place by British utility, National Grid. The rally was triggered by the utility’s decision to close down uneconomic gas-fired power stations by 2022 and replace them with cheaper and cleaner energies.

A run of encouraging U.S. data has also helped the dollar. On Thursday, Federal Reserve chairman Jerome Powell said the central bank will continue to raise interest rates “frequently” — causing the dollar to rise. The U.S. currency hit a six-month high against the euro on the news.

The fall in the dollar helped the best performing markets: Germany’s DAX climbed 1.7% and the stock indexes in London and Hong Kong each rose by around 1%.

Oil prices rallied again on Thursday, driven by fears of a supply shortage caused by the Saudi-Iran dispute. U.S. benchmark West Texas Intermediate crude was up 2.8% and Brent crude was up 2.5%.

China remains a major market to watch. Investors have been concerned about the slowing Chinese economy but reports Wednesday suggested the world’s second-largest economy is weathering a period of bad weather more smoothly than expected.

Chinese stocks staged a strong rally on Thursday: The Shanghai Composite jumped 1.8% and the Shenzhen Composite surged 2.1%.

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