The majority of the European markets finished in positive territory Wednesday, following the weakness of the previous two sessions. One of the major catalysts today came from new stimulus measures announced by the Bank of Japan. The markets received further support in the afternoon, after the U.S. reported some solid housing data.
The Bank of Japan on Wednesday announced a fresh round of stimulus to revive the economy by expanding the asset purchase by another JPY 10 trillion. The central bank also cut its assessment of the economy, saying the recovery is "pausing."
In addition, the central bank extended the intended timescale for completing the asset purchases till the end of December 2013 compared to its previous deadline of end of June 2013.
Bank of England policymakers unanimously decided to maintain quantitative easing at GBP 375 billion and the interest rate unchanged at 0.50 percent, the minutes of the meeting held on September 5 and 6 showed Wednesday.
The nine-member Monetary Policy Committee discussed whether it was appropriate to modify or continue with the programme of asset purchases it had agreed at its July meeting.
Germany's two-year note fetched positive yield for the first time since June at an auction on Wednesday. The country raised EUR 4.084 billion from the sale of its federal notes due September 2014, Bundesbank said. The auction drew bids totaling EUR 8.446 billion against a target of EUR 5 billion. The yield on the two-year debt known as Schatz rose to 0.06 percent from zero percent seen in the previous sale on August 22.
The Euro Stoxx 50 index of eurozone bluechip stocks increased by 0.55 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, added 0.49 percent.
The DAX of Germany climbed by 0.59 percent and the CAC 40 of France advanced by 0.54 percent. The FTSE 100 of the U.K. rose by 0.43 percent and the SMI of Switzerland gained 0.51 percent.
In Frankfurt, Porsche gained 7.82 percent. The automaker won the dismissal of two investor suits in connection with the allegations that the company had lied about its failed Volkswagen takeover plan in 2008.
Volkswagen climbed by 1.96 percent, BMW rose by 1.46 percent and Daimler finished higher by 2.25 percent.
Commerzbank increased by 2.14 percent and Deutsche Bank added 1.74 percent.
In Paris, Bouygues dropped by 0.54 percent, but peer Vinci rose by 1.07 percent. HSBC downgraded Bouygues to "Neutral" from "Overweight," while initiating Vinci with a "Neutral" rating.
Michelin raised its adjusted earnings guidance for 2015 to 2.9 billion euros from its previous target of 2.5 billion euros. The stock closed up by 1.31 percent.
STMicroelectronics fell by 2.09 percent, after S&P Equity Research downgraded the stock to "Sell" from "Hold."
Renault advanced by 2.11 percent and Peugeot gained 1.40 percent.
In London, Lonmin climbed by 0.62 percent. The striking miners at its Marikana platinum mine in South Africa's North West province finally struck a deal with the management on wages after a 39-day violent strike. The protesting miners were demanding pay rises and recognition of a new union.
Smiths Group reported a decline in fiscal 2012 profit hurt by one-time costs. The British technology company's revenue, however, increased with growth across all divisions. The stock finished higher by 1.63 percent.
HSBC rose by 1.83 percent and Lloyds Banking Group gained 1.65 percent. Royal Bank of Scotland also climbed, by 0.49 percent.
Holcim increased by 2.0 percent in Zurich, after JPMorgan raised its rating on the stock.
Eurozone construction output declined for the second consecutive month in July, but the rate of decrease slowed from June, Eurostat reported Wednesday. Construction output was down 0.3 percent from a month ago, when it fell 0.6 percent.
A leading indicator of the French economy increased modestly in July, following three consecutive monthly declines, data from a survey by the Conference Board showed Wednesday. The leading economic index increased 0.3 percent from the previous month to 113.3 in July, which followed decreases of 0.3 percent and 0.2 percent respectively in June and May.
Economic expectations in Switzerland deteriorated in September, data from a survey by the European Economic Research (ZEW) and Credit Suisse showed Wednesday. The ZEW index, which measures expectations of surveyed financial market experts regarding the economic development in Switzerland on a six-month time horizon, declined by 1.6 points in September.
New housing construction in the U.S. rebounded in August from an unexpectedly large dip in July but failed to reach the levels expected by most economists. According to figures released Wednesday by the Commerce Department, new privately-owned housing starts came in at a seasonally adjusted annual rate of 750,000, a 2.3 percent increase from revised July levels. Most economists had expected the rate of new construction to come in at 768,000.
New building permits, a leading indicator for housing starts, fell modestly in August, falling to a seasonally adjusted annual rate of 803,000, 1.0 percent below the revised July rate of 811,000. Most economists had expected building permits to show a steeper drop to an annual rate of about 796,000.
Existing home sales in the U.S. continued to improve in the month of August, according to a report released by the National Association of Realtors on Wednesday, with sales rising by much more than economists had anticipated.
NAR said existing home sales jumped 7.8 percent to an annual rate of 4.82 million in August from 4.47 million in July. Economists had expected existing home sales to climb to an annual rate of 4.55 million.
by RTT Staff Writer
For comments and feedback: email@example.com