The French market is in negative territory in afternoon trading Wednesday, as investors are anxiously looking for the outcome of the Federal Reserve meeting, which is concluding today. The Fed may expand its bond-buying program Operation Twist, which is scheduled to expire this month. There are also hopes that another round of quantitative easing may be announced.
At the G20 summit that concluded on Tuesday, Italy put forth a proposal urging Eurozone economies to allow the common rescue funds to buy the debt of troubled economies on the secondary markets. This would help the countries avoid a bailout and lower their borrowing costs.
The proposal, presented by Italy's Prime Minister Mario Monti, is backed by France. It is likely to be discussed at a meeting between the leaders of core euro area economies in Rome on June 22, reports said.
Meanwhile, French President Francois Hollande called for the issuance of euro bills as a short-term measure, the newspaper Handelsblatt reported Tuesday, citing a strategy paper.
German Chancellor Angela Merkel denied that there were any discussions at G20 summit on using either the European Financial Stability Facility or the European Stability Mechanism to buy Eurozone sovereign debt.
The Euro Stoxx 50 index of eurozone bluechip stocks is losing 0.13 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, is falling 0.23 percent.
After seeking direction in early trade, the CAC 40 index is currently falling 0.37 percent.
Loreal is losing 2.7 percent, leading the decliners, followed by LVMH, which is down 1.7 percent.
Danone is declining 1.6 percent. UBS lowered its rating on the stock to "Neutral" from "Buy" and Merrill Lynch cut the stock to "Underperform" from "Buy". Several brokerages reduced their price target on the stock.
The dairy giant Tuesday slashed its operating margin target for 2012, citing steeper-than-anticipated demand deterioration in Southern Europe, particularly in Spain, and escalating costs.
Peugeot is gaining about 4 percent, while Renault is advancing 0.6 percent.
Credit Agricole, Societe Generale and BNP Paribas are gaining between 4 percent and 1.9 percent.
Elsewhere in Europe, the German DAX is adding 0.05 percent and the UK's FTSE 100 gaining 0.14 percent. However, Switzerland's SMI is losing 0.60 percent.
In economic news, UK unemployment claims increased unexpectedly in May, the latest figures from the Office for National Statistics showed.
The jobless claims or claimant count increased by 8,100 from April to 1.60 million in May. This was forecast to fall by 4,000 on a month-on-month basis.
Meanwhile, policymakers of the Bank of England decided to retain the size of quantitative easing unchanged in a split vote, the minutes of the meeting showed. Four members of the Monetary Policy Committee sought more stimulus, while five members voted to maintain the QE intact at 325 billion pounds.
Across Asia/Pacific, markets ended mostly higher. Australia's All Ordinaries added 0.2 percent, Hong Kong's Hang Seng advanced 0.5 percent and Japan's Nikkei 225 climbed 1.1 percent. However, China's Shanghai Composite Index dropped 0.3 percent.
In the U.S., futures point to a mixed open on Wall Street. In the previous session, stocks moved higher as traders expressed continued optimism about the likelihood of further stimulus from the Federal Reserve.
In the commodity space, crude for July delivery is losing $0.22 to $83.81 per barrel and August gold is falling $9.3 to $1613.9 a troy ounce.
by RTT Staff Writer
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