At European stock exchanges at the beginning of today’s trading, leading indices fell after yesterday’s strong rise, as investors are cautious ahead of decisions by the European and British central banks on interest rates.
The FTSEurofirst 300 index of leading European stocks fell by 1.2 percent to 688 points by 9:45 AM, after jumping 4 percent yesterday. The Frankfurt DAX, London FTSE, and Paris CAC indices were simultaneously down between 1.3 and 1.5 percent. Investors are cautious ahead of today’s meetings of the European and British central banks. The ECB is expected to reduce the key interest rate by 0.50 percentage points to 1.5 percent.
The Bank of England is also expected to cut the key interest rate by 0.50 percentage points to a record low of 0.50 percent. Following yesterday’s strong rise, today the prices of stocks in the energy sector fell. Shares of Total, ENI, BP, and Royal Dutch Shell decreased by between 0.9 and 2 percent. Today’s drop in stock prices is attributed by analysts to profit-taking, which investors opted for after yesterday’s strong rise of leading European stock indices.
“Yesterday, stock prices rose sharply, thanks to good economic news from China, but given the uncertainty in the market, it is difficult to expect such a strong rise two days in a row,” says Bernard McAlinden, a strategist at NCB Stockbrokers. On the Tokyo Stock Exchange, the Nikkei index rose by 1.95 percent to 7,433 points. (Hina)
