LONDON: European stock markets closed lower yesterday as upbeat US data failed to take investor’s minds off of weaker economic prospects for the global economy.
London’s benchmark FTSE 100 index of top companies slid 0.62 percent to 6,304.58 points while in Paris the CAC 40 was off by 0.67 percent at 3,685.79. Frankfurt’s DAX 30 lost 0.39 percent to 7,682.58 points as dealers also digested news that German investor sentiment fell by more than expected in April.
In Madrid, the Ibex-35 fell by 0.82 percent to 7,948.7 points, while in Milan the FTSE Mib was 0.61 percent lower at 15,533 points. “Mounting concerns about the global economic outlook and events in Boston have triggered a flight to quality,” said RIA Capital Markets analyst Nick Stamenkovic.
The IMF cut its world growth forecast for 2013 as the eurozone recession continued to drag, but predicted growth overall would pick up in the second half of the year. In its newest assessment of the global economy, the International Monetary Fund said world output would expand by 3.3 percent this year, compared with the 3.5 percent it predicted in January.
On other financial markets, “the dollar has benefited from its safe-haven status, with commodity prices losing ground,” Stamenkovic added. In foreign exchange activity, the US dollar rebounded to 97.77 yen from 96.72 yen late on Monday in New York. The euro meanwhile also climbed to $1.3136, from $1.3036.
In the wake of twin explosions at the Boston Marathon which killed at least three and wounded more than 170 , cities from New York to Los Angeles went on high alert, and traders were initially skittish. They seemed to have recovered some of their poise however, and US stocks rallied in midday trading in New York.
The Dow Jones Industrial Average gained 0.87 percent to 14,726.48 points, while the broad-based S&P 500 jumped 1.10 percent to 1,569.47, and the tech-rich Nasdaq Composite Index added 1.23 percent to 3,256.17.
Among the positive US news was data showing that housing starts climbed to 1,040,000 in March from 917,000 in February, smashing analysts’ expectations. Solid earnings reports from Goldman Sachs, Coca-Cola and Johnson & Johnson also helped to propel stocks higher.
Gold prices bounced back a bit. At the evening fixing on the London Bullion Market, an ounce of gold cost $1,380. It had earlier plunged to $1,321.95, the lowest level since January 2011.
China said its economy grew 7.7 percent in the first three months of 2013. That was well below the 8 percent forecast in an AFP poll of 12 economists and worse than the 7.9 percent level seen over the previous three months. AFP
