European markets mostly fall as central banks in focus

European markets mostly fall as central banks in focus

LSE London Stock Exchange
Logo of the London Stock Exchange.

LONDON: European stock markets mostly fell on Monday (Dec 11), with investors treading water ahead of key central bank policy meetings later this week, traders said.

On the other side of the Atlantic, Wall Street stocks edged higher as investors shrugged off an explosion near Times Square that resulted in a handful of injuries, none of them life-threatening.

"It's been another quiet start to trading in what is otherwise going to be a very busy week in financial markets, with a number of central banks scheduled to make interest rate announcements," said Oanda analyst Craig Erlam.

AxiTrader analyst James Hughes also noted the "subdued" start to the week, when "the big headline act ... is undoubtedly the FOMC rate decision on Wednesday night".

There was likely to be "a degree of caution ahead with traders not willing to take on too many large positions ahead of what is believed to be a 25 basis-point hike in rates in the US," the expert said.

European bourses were lower at the close of the session, with Frankfurt and Paris both slipping by around 0.2 per cent, while London bucked the trend, showing a gain of around 0.8 per cent.

Eyes are now on the Fed's last monetary policy meeting of the year, which winds down on Wednesday.

Most analysts expect the central bank's policy-setting Federal Open Market Committee to lift interest rates again, but they will be even more interested in what boss Janet Yellen has to say about the timetable for future increases.

"The Fed will no doubt provide markets with a central focus this week, where the FOMC are expected to come good on their promise of three rate hikes for 2017," said IG analyst Joshua Mahony.

"With market expectations for 2018 somewhat up in the air, there is a feeling that investors are hungry for clues as to where things will stand in 12-months' time."

In Asia on Monday, Tokyo ended 0.6 per cent higher as the Nikkei rose for a third straight day, while Hong Kong surged more than one percent and Shanghai added one percent as Chinese traders brushed off lower than expected inflation figures.

BITCOIN SURGES

Bitcoin catapulted past US$18,000 on a wave of fresh optimism, despite persistent bubble fears.

The unit remains in focus after ticking off multiple records since the start of December.

Trading of the controversial digital currency on a futures contract began on Sunday on the Chicago board options exchange (Cboe) at a price of US$15,000.

The move is a milestone for bitcoin, which has previously only been tradable on unregulated exchanges.

Bitcoin was trading at US$17,600 per unit for the futures contract expiring on Jan 17, exceeding the highest value it had reached on alternative non-regulated internet platforms, and even climbed past US$18,000.

"The level of volatility the introduction will have is uncertain," said Shane Chanel, equities and derivatives adviser at ASR Wealth Advisers.

Key figures around 1640 GMT:

London - FTSE 100: UP 0.8 per cent at 7,453.48 (close)

Frankfurt - DAX 30: DOWN 0.2 per cent at 13,123.65 (close)

Paris - CAC 40: DOWN 0.2 per cent at 5,386.83 (close)

EURO STOXX 50: DOWN 0.3 at 3,582.21

Tokyo - Nikkei 225: UP 0.6 per cent at 22,938.73 (close)

Hong Kong - Hang Seng: UP 1.1 per cent at 28,965.29 (close)

Shanghai - Composite: UP 1.0 per cent at 3,322.20 (close)

Euro/dollar: UP at US$1.1798 from US$1.1791

Pound/dollar: DOWN at US$1.3358 from US$1.3368

Dollar/yen: FLAT at 113.36 yen

Oil - Brent North Sea: UP US$1.18 at US$64.58 per barrel

Oil - West Texas Intermediate: UP 37 cents at US$57.73

Source: AFP/de

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