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German Market Falls As Fed Dampens Stimulus Hopes

The German market is notably lower on Wednesday, after minutes of the latest monetary policy meeting of the U.S. Federal Reserve dampened hopes of additional stimulus in the world's largest economy.

The minutes of the Fed's March meeting indicated that only two of the 10 members saw the case for another round of quantitative easing amid signs of improvement in the U.S. economy. The minutes of the January meeting had shown that "a few members" believed conditions could warrant additional securities purchases.

The Euro Stoxx 50 index of eurozone bluechip stocks is declining 1.19 percent, while the Stoxx Europe 50 index, which includes some major U.K. Companies, is dropping 0.66 percent.

The DAX index opened lower and is currently declining 1.88 percent.

Infineon Technologies is declining the most by falling 4.2 percent, followed by Lufthansa, which is down 3.5 percent.

HeidelbergCement and ThyssenKrupp are dropping 2.9 percent and 2.6 percent, respectively.

Daimler is falling 2.3 percent. The carmaker backed its earnings and revenue forecast for fiscal year 2012 after reporting strong vehicle sales for the first quarter. BMW and Volkswagen are down about 2 percent each.

Commerzbank is falling 1.5 percent and Deutsche Bank is losing 1.3 percent.

Credit Suisse raised its rating on Hugo Boss to "Neutral" from "Outperform." The stock is declining 4.5 percent.

Deutsche Wohnen was cut to "Neutral" from "Buy" at UBS. The stock is falling 3 percent.

Elsewhere in Europe, the French CAC 40 is declining 1.14 percent and the UK's FTSE 100 is dropping 1.20 percent. Switzerland's SMI is falling 0.53 percent.

In economic news, the European Central Bank is set to announce its rate decision at 7.45 am ET. Economists widely expect policymakers to maintain the rate at 1.00 percent.

Germany's service sector growth slowed less than initially estimated in March, final data released by Markit Economics and BME showed. Meanwhile, the French private sector contracted more than initially estimated in March, a survey by Markit Economics revealed.

Data from Eurostat showed that Eurozone retail sales declined in February, but at a slower-than-expected pace.

Activity in the British service sector increased at a faster pace in March, contrary to economists' forecast for a slowdown, data from a survey by Markit Economics and the Chartered Institute of Purchasing and Supply showed.

China on Tuesday almost tripled the amount of money that foreign fund managers can invest in the country's capital markets. The China Securities Regulatory Commission increased the quotas for foreign institutions to $80 billion from $30 billion, as part of an expansion of the qualified foreign institutional investor scheme.

Across Asia/Pacific, Australia's All Ordinaries slipped 0.12 percent and Japan's Nikkei 225 declined 2.3 percent.

In the U.S., futures point to a lower open on Wall Street. In the previous session, major averages closed lower as the minutes of the Fed's March meeting seemed to indicate that the members were less willing to initiate another round of quantitative easing. The Dow fell 0.5 percent, the Nasdaq edged down 0.2 percent and the S&P 500 slid 0.4 percent.

In the commodity space, crude for May delivery is falling $0.69 to $103.32 per barrel and June gold is dropping $35.2 to $1636.8 a troy ounce.

by RTT Staff Writer

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