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European Market Commentary
11/5/2009 1:48 AM ET
(RTTNews) -
The European markets are likely to open lower on Thursday due to profit taking following sharp gains in the previous session. With U.S stocks failing to sustain an early upmove overnight, underlying sentiment may remain extremely cautious ahead of rate decisions by the Bank of England and the European Central Bank.
Investors also brace for earnings from Unilever. Meanwhile, BNP Paribas reported a better- than-expected third-quarter net income attributable to equity holders of EUR 1.3 billion, up from EUR 901 million last year, beating analysts' forecasts.
After a fairly decent start, most Asian stock markets drifted lower on Thursday on growing concerns about the nascent global economic recovery. Investors also tread a cautious path ahead of the release of key data on U.S. jobs.
On Wall Street, stocks ended on a mixed note for a second straight session on Wednesday following the release of a pair of rather lukewarm economic reports. The Institute for Supply Management said that activity in the service sector grew for the second consecutive month in October, but the pace of growth unexpectedly slowed compared to the previous month.
Separately, a report on private sector employment showed that the pace of job losses continued to decrease in October, while non-farm private employment fell by 203,000, higher than a loss of 198,000 jobs that economists had expected.
On the other hand, the Fed left its target rate unchanged in a range from zero to a quarter percent and reiterated its assessment that "exceptionally" low rates will continue for an "extended period." The major averages saw notable downside in late day trading, pushing the tech-heavy Nasdaq into negative territory. However, the Dow ended up 0.3% and the S&P 500 rose 0.1%.
Crude oil price settled higher at $80.40 a barrel, up 80 cents on Wednesday, helped by a weaker dollar and a U.S Energy Information Administration report showing an unexpected drop in weekly inventories. In Asian trading on Thursday, crude oil is now trading weak at $79.73 a barrel.
In corporate news, General Motors' decision to scrap its earlier plans to sell Opel to a consortium led by Canadian auto parts maker Magna and Russian bank Sberbank has sparked off an outrage in Germany, with several workers' unions and politicians reacting angrily to the GM move.
Virgin Media Inc. on Wednesday said that it priced the offering of about £715 million equivalent aggregate principal amount of senior notes due 2019 of its wholly-owned subsidiary Virgin Media Finance Plc.
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