European stock markets saw a slight decline on Thursday morning, following a rise the day before, as investors are reluctant to take risks ahead of decisions and messages from the leaders of the European Central Bank during their regular meeting.
STOXX 600 index of leading European stocks was down 0.1 percent at 9:30 AM, following a significant rise yesterday. This morning, the London FTSE index weakened by 0.19 percent to 7,515 points, while the Frankfurt DAX slid 0.22 percent to 16,850 points, and the Paris CAC fell 0.14 percent to 7,448 points.
Although no changes in monetary policy are expected, investors will focus on today’s ECB leaders’ meeting as their messages could clarify when the start of the interest rate reduction cycle might be expected.
Meanwhile, Asian stock prices rose. MSCI index of Asia-Pacific stocks, excluding Japan, was up 0.7 percent around 9:30 AM, strengthening for the third consecutive day. The Nikkei index on the Tokyo Stock Exchange rose by 0.1 percent, while stock prices in South Korea, Australia, Hong Kong, and Shanghai increased between 0.1 and 3 percent.
The strong rise in stock prices in Hong Kong and Shanghai is attributed to the announcement from the central Chinese bank that it will reduce the reserve requirement ratio for banks starting in February to improve liquidity and stimulate lending. In this way, monetary authorities are trying to support an economy that has been growing slower than expected for some time.
While Chinese markets have risen, other markets in the region are trading cautiously as there are not many reasons to buy stocks, especially since speculation has subsided that central banks in Western countries might start lowering interest rates as early as the first quarter.
