Europe stocks up as Greece gets focus
European stock markets rose on Thursday as traders focused on the Greek debt saga and outlook for interest rates on both sides of the Atlantic.
London’s benchmark FTSE 100 index climbed 0.63 percent to trade at 6,981.00 points approaching midday in the capital.
Frankfurt’s DAX 30 grew 0.36 percent to 12,078 points and the CAC-40 in Paris advanced 0.78 percent to 5,177.00 points compared with Wednesday’s close.
In foreign exchange, the European single currency fell to US$1.0743 from US$1.0780 late in New York on Wednesday.
“Athens has vowed to repay the IMF today and the market is optimistic the agreement will be honored,” said David Madden, market analyst at IG trading group.
Attention among traders Thursday was also on the Federal Reserve.
Minutes of the U.S. central bank’s last policy meeting released late in New York on Wednesday showed a split over when interest rates should again start rising in the world’s biggest economy.
According to the minutes of the March 17-18 meeting of the Federal Open Market Committee, “several participants” thought conditions were right for a June hike in the federal funds rate, stuck near zero since late 2008.
Others deemed the economy would not be able to weather a hike until later in the year, while “a couple” said liftoff would remain unlikely until 2016.
The Bank of England was meanwhile Thursday expected to keep its main interest rate at 0.50 percent following its last monetary policy meeting before Britain’s general election on May 7.
“The Bank of England, like its U.S. counterpart, is also weighing up the timing of its first rate hike (in years), although it appears to be a little behind at the moment despite the strength of the (British) economy as the country flirts with deflation,” said Craig Erlam, senior market analyst at Oanda
Asian Markets Mostly Down but
Hong Kong Soars
Hong Kong shares motored Thursday, rising more than six percent over two days, as mainlanders pile into the market, but most other Asian equities retreated after minutes from the U.S. Federal Reserve showed policymakers split on when to hike interest rates.
Wall Street provided a healthy platform for regional investors while the dollar ticked higher.
Hong Kong jumped 2.70 percent, or 707.53 points, to 26,944.39, although that is well short of the 6.7 percent surge seen in the opening exchanges — the index ended 3.80 percent higher Wednesday.
But Shanghai lost 0.93 percent, or 37.28 points, to end at 3,957.53 on profit-taking.
Tokyo rose 0.75 percent, or 147.91 points, to 19,937.72 thanks to a weaker yen but Sydney lost 0.48 percent, or 28.53 points, to close at 5,932.20 and Seoul was marginally lower, dipping 0.39 points to 2,058.87.
Shares in Hong Kong surged for a second day as mainland investors capitalize on the Stock Connect scheme with Shanghai that allows them to trade a limited amount of shares in the southern Chinese city, and vice versa.
The program was initially met with scant interest, but mainland authorities’ decision last month to expand the number of fund-management firms allowed to buy in Hong Kong has seen activity surge and on Wednesday turnover hit a record HK$250.03 billion (US$32 billion).
“The catalyst for the rally in Hong Kong was the allowance by the Chinese securities regulators to have Chinese mutual funds be able to invest in Hong Kong listed companies,” Mark Matthews, Singaporebased head of Asia research at Bank Julius Baer & Co., told Bloomberg TV.
On Wednesday traders on both sides of the border for the first time used up their daily quota of deals allowed under the link-up.
Shanghai stocks have been rising for more than a year as retail investors bet — often using borrowed money — on authorities loosening monetary policy further to support the world’s number two economy.
The central bank has already cut interest rates twice since November, while Premier Li Keqiang last month suggested the government had the weapons to support growth if necessary.
Gold fetched US$1,199.20 against US$1,210.60 late Wednesday. In other markets: — Bangkok closed flat, rising 0.02 percent, or 0.25 points, to 1,545.11.
— Mumbai rose 0.62 percent, or 177.46 points, to end at 28,885.21.
— Singapore closed down 0.01 percent, or 0.38 points, to 3,460.30.
— Jakarta closed up 0.26 percent, or 14.32 points, to 5,500.90.
— Malaysia’s main index lost 0.05 percent, or 0.92 points, to close at 1,849.39.
— Wellington gave back 0.21 percent, or 12.55 points, to end at 5,847.17.
— Manila was closed for a public holiday.