Exuberance in the European stock markets is expected to abate on Wednesday as equities brace for a cautious trading day amidst re-emergence of taper-talk from the U.S. Wednesday is expected to sober down the smart rally of Tuesday that witnessed DAX 30 closing at a record high, CAC 40 closing at a 21 year high, Italy's FTSE MIB closing at 13 year high and Spain's IBEX 35 hitting a 16 month high.
Overnight, the NASDAQ had shed 0.23 percent and the Dow Jones Industrial Average had gained 0.13 percent as cautious investors weighed in growth optimism with inflation fears and Fedspeak revealed dwindling headroom for forbearance on the monetary policy front.
On Tuesday, the European indexes had recorded a smart rally with the DAX 30 surging by 0.95 percent, FTSE 100 strengthening by 0.82 percent; pan European Stoxx 600 adding 0.75 percent, CAC 40 rallying by 0.66 percent and the Swiss SMI gaining 0.63 percent.
Gold declined from five month highs as Manufacturing PMI of 61.2 reflected robust economic recovery in the U.S. The yellow metal is currently trading at $1898 per troy ounce, slightly down from Tuesday's close of $1900.
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