The UK market is notably higher in afternoon trading Wednesday, ahead of the interest rate decision from the European Central Bank. The market opened for trading this week after a two-day holiday for the Queen's Diamond jubilee festivities. The Asian stocks mostly rose, buoyed by hopes of intervention from central banks, including the Federal Reserve, to boost economic growth.
The European Central Bank is set to announce its monetary policy decision at 7.45 am ET, with economists expecting a 25 basis point one-off cut to 0.75 percent.
The leaders of the seven industrialized nations discussed the situation in Eurozone at an emergency meeting called on Tuesday but announced no joint action. Meanwhile, Spanish Treasury Minister Cristobal Montoro said the country's banks may need European assistance as the capital markets were closing before euro area's fourth biggest economy.
Meanwhile, Moody's Investors Service on Tuesday downgraded six German banks, including Commerzbank, citing increased risk of further shocks emanating from the eurozone debt crisis and the limited capacity of the banks to absorb losses.
The ratings agency also downgraded Austria's three largest banks, citing their vulnerability to the adverse operating conditions in some of their core markets in Europe.
The Euro Stoxx 50 index of eurozone bluechip stocks is climbing 2.2 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, is gaining 1.6 percent.
The UK's FTSE 100 is rising 1.4 percent.
Anglo American is climbing 4.4 percent and Antofagasta is rising 4 percent. BHP Billiton is gaining 3.3 percent and Rio Tinto is up 3.5 percent. Fresnillo is surging over 6 percent.
Kazakhmys and Vedanta are advancing 5.5 percent and 5.6 percent, respectively.
Barclays is climbing 5.2 percent and Lloyds Banking is rising 4.6 percent.
Lloyds is selling a portfolio of Australian corporate real estate loans worth 809 million pounds to AET SPV Management Pty Ltd. for about 388 million pounds cash.
Man Group is surging 7.2 percent reportedly on a positive broker recommendation. Evraz is gaining 4.9 percent.
Diageo plans to invest over 1 billion pounds in Scotch whisky production over the next five years to meet growing global demand for its brands, especially in emerging markets. The stock is up 2.4 percent.
Petropavlovsk is gaining 4.8 percent after UBS reportedly lifted the stock to "Buy" from "Neutral."
Mecom Group is plunging nearly 46 percent on profit warning.
Elsewhere in Europe, the German DAX is climbing 1.7 percent and Switzerland's SMI is gaining 0.9 percent. The French CAC 40 is advancing 2 percent.
In economic news, Germany's industrial production decreased more than expected in April, the Federal Ministry of Economy and Technology said. Industrial production fell 2.2 percent in April from a month ago, offsetting March's revised 2.2 percent increase. Economists were expecting a 1 percent fall for April.
The Eurozone economy stagnated in the first quarter, revised data from Eurostat showed, confirming that the single-currency bloc has escaped a fall-back into recession. The gross domestic product remained flat compared to the previous quarter after shrinking 0.3 percent in the fourth quarter of 2011.
Across Asia/Pacific, Australia's All Ordinaries gained 0.30 percent, Hong Kong's Hang Seng climbed 1.4 percent and Japan's Nikkei 225 added 1.8 percent. However, China's Shanghai Composite Index edged down 0.1 percent.
In the U.S., futures point to a higher open on Wall Street. In the previous session, stocks moved mostly higher over the course of the trading day after showing a lack of direction earlier in the session. The major averages ended the day in positive territory, although the Dow underperformed its counterparts. The Dow edged up 0.2 percent, while the Nasdaq rose 0.7 percent and the S&P 500 climbed 0.6 percent.
In the commodity space, crude for July delivery is gaining $1.17 to $85.46 per barrel and August gold is advancing $19.9 to $1636.8 a troy ounce.
by RTT Staff Writer
For comments and feedback: editorial@rttnews.com
Market Analysis