The UK market is higher in afternoon trading Thursday, ahead of the interest rate decision from the Bank of England, as speculation continued that central banks will step in to revive economic growth. The Asian markets ended mostly higher on stimulus hopes.
German Chancellor Angela Merkel has said that she would work towards a European political union even if it means some countries integrating faster than others. "We need a political union first and foremost," she told German public television ahead of talks with British Prime Minister David Cameron in Berlin.
Merkel also called for a budgetary union, echoing a similar call by Cameron, who urged the euro leaders on Wednesday to come up with an "immediate plan" to resolve the crisis that gripped the monetary union.
Spain's Economy Minister Luis de Guindos on Wednesday rejected reports that his country has requested a European bailout for its troubled banking sector, and insisted that a final decision on the issue would be taken only after an independent audit of the banks is completed in the coming weeks.
Meanwhile, Spain raised 2.07 billion euros from bond auction, exceeding the 2 billion euros maximum target, but borrowing costs increased notably. The treasury sold 611 million euros from the issue of bonds maturing on January 2022 at a yield of 6.044 percent. The yield rose from 5.743 percent at the prior auction on April 19. The bid-to-cover ratio increased to 3.29 from 2.42.
The Euro Stoxx 50 index of eurozone bluechip stocks is adding 0.67 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, is dropping 0.47 percent.
The FTSE 100 index is adding 0.66 percent.
Telecom giant Vodafone and its Spanish rival Telefonica have agreed to form a 50/50 joint venture in the UK by combining their mobile phone networks. Vodafone shares are modestly lower.
Burberry Group is climbing 4.6 percent, reportedly on a positive broker recommendation.
Barclays is rising 2.4 percent, Royal Bank of Scotland is gaining 2.9 percent and Lloyds Banking is adding 3.4 percent.
GKN is advancing 3.3 percent. InterContinental Hotels Group is gaining 2.6 percent.
Johnson Matthey is advancing 3.8 percent. The specialty chemicals firm announced a special dividend as full year profit increased significantly from last year.
Man Group is losing 2.1 percent. Randgold Resources is receding 2.3 percent.
Elsewhere in Europe, the German DAX is advancing 0.5 percent and the French CAC 40 is adding 0.6 percent. Switzerland's SMI is rising 0.2 percent.
In economic news, the Bank of England is set to announce its interest rate decision at 7.00 am ET. The central bank is expected to halt 325 billion pounds bond purchase program. Also, the bank is set to maintain its record low 0.50 percent interest rate.
French jobless rate under the definition of International Labor Organization increased in the first quarter, figures from the statistical office Insee showed. The jobless rate in metropolitan France jumped to 9.6 percent from 9.3 percent in the previous quarter. The rate is as high as in 1999.
Across Asia/Pacific, most major markets rose on stimulus hopes. Australia's All Ordinaries advanced 1.3 percent, Hong Kong's Hang Seng gained 0.9 percent and Japan's Nikkei 225 climbed 1.2 percent.
However, China's Shanghai Composite Index fell 0.7 percent. The Dragon Nation has said that it would introduce new bank capital rules only at the start of next year, as the slowing economy gave policymakers less room for measures that may cut back lending.
In the U.S., futures point to a higher open on Wall Street, ahead of a testimony by Federal Reserve Chairman Ben Bernanke before the joint economic committee. In the previous session, stocks closed sharply higher amid optimism about further stimulus from the world's central banks. The Dow jumped 2.4 percent, the Nasdaq surged up 2.4 percent and the S&P 500 soared 2.3 percent.
In the commodity space, crude for July delivery is losing $0.16 at $84.86 per barrel and August gold is losing $15.5 to $1618.7 a troy ounce.
by RTT Staff Writer
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