RTTN: European Stocks Seen Little Changed Ahead Of ECB Meet
(RTTNews) - European stocks may edge higher in early trading on Wednesday, driven by expectations about stronger economic growth. That said, trading may confine to a narrow range ahead of rate decisions by the Bank of England and European Central Bank tomorrow.
Asian stocks turned in a mixed performance on Wednesday, with the markets in India, Malaysia, Japan, New Zealand and South Korea posting modest losses after the minutes from the Fed's March policy meeting showed central bankers differed over whether or not to begin removing stimulus this year. However, China's Shanghai Composite index was up around a percent, shrugging off Beijing's fourth interest rate increase since October on Tuesday.
Crude oil futures are hovering hovering near $108 a barrel ahead of a U.S. government inventory report later in the day, which is expected to show a rise in crude stockpiles of about 1.6 million barrels. Keeping aside other factors affecting oil trading, an ECB rate hike on Thursday and greater chances of two more rate hikes later this year may push up oil prices as a stronger European currency would make the dollar-priced oil cheaper.
In the forex market, the yen dropped to a six-month low against the dollar on speculation that Japan may trail other major nations in ending stimulus measures as the nation rebuilds itself.
On the macroeconomic front, the rate of inflation in the United Kingdom slowed in March to 2.4 percent compared to 2.7 percent in the previous month, according to survey results released by the British Retail Consortium.
Another report on jobs released today by the Recruitment and Employment Confederation and KPMG showed that U.K. permanent staff placements as well as temporary appointments grew at a slower pace in March.
In corporate news, SGS SA announced the acquisition of Sertec S.r.l., a provider of health & safety service in Italy to gain access into the highly regulated H&S Italian market.
Commerzbank AG proposed to reduce the silent participations of the Financial Market Stabilization Fund or SoFFin totaling EUR 16.2 billion by around EUR 14.3 billion until June 2011, and thus to repay them to a large extent.
European stocks closed in the red for a second day in a row on Tuesday, as investors worried that an impending rate hike from the European Central Bank will derail an already fragile economic recovery in parts of the euro zone.
The Stoxx Europe 50 index of euro zone blue chips dropped 0.2 percent and the FTSE of the U.K. dipped 0.16 percent, while Germany's DAX and France's CAC 40 closed little changed.
