European stocks climb as investment rules take effect

European stocks climb as investment rules take effect

London Stock Exchange LSE
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LONDON: Europe's major stock markets rose on Wednesday (Jan 3) but gains were tempered as new investment regulations were rolled out across the region.

Investors have kicked off 2018 in buoyant mood as the world economy stirs to life and job creation, particularly in the United States, picks up.

World equity markets had already fizzed higher on Tuesday on growing investor optimism, with the exception of key European markets, but some analysts cautioned over the outlook for the rest of the year.

Regardless, Wall Street powered on with small gains approaching midday in New York.


Europe also rose despite the introduction of so-called MiFID II rules, which seek to tighten financial market regulation to stop rampant speculation.

The regulations, unveiled in 2011 at the height of the eurozone debt crisis and in the wake of the global economic meltdown, aim to curb speculative trading in commodities and to regulate high-frequency trading to protect investors.

In a new twist on Wednesday, British markets regulator the Financial Conduct Authority and German counterpart BaFin both granted the complex derivatives market another 30 months to comply with MiFID II reforms.

Wednesday's climb followed another record-breaking session on Wall Street.

Back in Europe, London trod 0.3 per cent higher, with clothing retailer Next boosted by news of bumper Christmas sales, while Paris added 0.8 per cent and Frankfurt 0.9 per cent.

"European equities are mostly higher in afternoon action, rebounding slightly from yesterday's shaky start to the New Year," said analysts at the Charles Schwab brokerage.

But markets "are choppy as the European Union's new investment regulations, known as MiFID, are taking effect today", they added.

Earlier, Asia was given another strong lead from Wall Street where technology titans Apple, Amazon and Google-parent Alphabet were the standout performers.


In foreign exchange activity on Wednesday, the dollar recovered somewhat against the euro following its recent poor form.

The European single currency had jumped on Tuesday to a four-month high at US$1.2081.

"Euro/dollar has eased off ... after a smashing start for this year," added ThinkMarkets analyst Naeem Aslam.

"The rally is primarily pumped by the optimism that the eurozone's economy is performing well and the European Central Bank would stay on track to finish its ultra-loose monetary policy this year."

Elsewhere, oil prices moved higher, having briefly hit 2.5-year peaks the previous day on geopolitical concerns in key crude producer Iran.

Key figures around 1635 GMT:

London - FTSE 100: UP 0.3 per cent at 7,671.11 points (close)

Frankfurt - DAX 30: UP 0.9 per cent at 12,989.82 (close)

Paris - CAC 40: UP 0.8 per cent at 5,331.28 (close)

EURO STOXX 50: UP 0.6 per cent at 3,509.88

New York - DOW: UP 0.2 per cent at 24,883.69

Hong Kong - Hang Seng: UP 0.2 per cent at 30,560.95 (close)

Shanghai - Composite: UP 0.6 per cent at 3,369.11 (close)

Tokyo - Nikkei 225: Closed for holiday

Euro/dollar: DOWN at US$1.2025 from US$1.2059 late on Tuesday

Pound/dollar: DOWN at US$1.3514 from US$1.3594

Dollar/yen: UP at 112.36 yen from 112.26 yen

Oil - Brent North Sea: UP 81 cents at US$67.38 per barrel

Oil - West Texas Intermediate: UP $1.07 at US$61.44

Source: AFP/de