European stocks rise as US Fed Reserve meets

European stocks rise as US Fed Reserve meets

London Stock Exchange LSE
Logo of the London Stock Exchange

LONDON: Global stock markets were higher on Tuesday (Dec 12), as investors prepared themselves for a likely increase in US interest rates.

On Wall Street, the Dow rose from record peaks, lifted by a Boeing dividend boost.

And on this side of the Atlantic, all of the main indices ended the session higher, with London's FTSE 100 index advancing 0.6 per cent, the Paris CAC 40 index adding 0.8 per cent and Frankfurt's DAX 30 up 0.5 per cent.

Energy stocks, in particular, were being boosted by a general increase in crude prices.

"The shutdown of the Forties pipeline can have a durable impact on the price because it adds to the tighter supply picture brought about by OPEC's output cuts," said London Capital Group analyst, Jasper Lawler.

"We suspect ... that Brent is on its way to challenge the 2015 high near US$68 per barrel."

Some degree of profit-taking had set in by late afternoon, with crude prices coming off recent highs. But the overall rise has energised the oil sector because higher prices tend to translate into bumper profits and revenues.

In London, Anglo-Dutch energy giant Royal Dutch Shell's 'A' shares jumped 1.7 per cent to 2,452 pence and British rival BP gained 2.4 per cent to 511 pence.

French oil and gas titan Total saw its share price rally 1.5 per cent to €47.78 in Paris.


Focus this week, meanwhile, is also on monetary policy meetings of central banks in the United States, Britain and the eurozone.

On Wednesday, the US Federal Reserve unveils its latest decision, followed on Thursday by both the Bank of England (BoE) and the European Central Bank.

The Fed is expected to announce an increase in the benchmark rate and outline the prospects for additional increases in 2018.

"European markets are trading in positive territory, with oil stocks particularly buoyant after the shutdown of the Forties Pipeline sent Brent crude oil to a 30-month high," said Rebecca O'Keeffe, head of investment at online stockbroker Interactive Investor.

"With all eyes on central banks this week, investors will be hoping that (ECB chief) Mario Draghi will remain the benevolent Santa Claus for markets and not turn into Scrooge," she told AFP.

Despite UK annual inflation hitting a near six-year high in November, according to official data on Tuesday, the BoE was expected to keep rates on hold at its meeting this week.

In Asia, Tokyo's Nikkei ended down 0.3 per cent, while Shanghai sank more than one percent by the close and Hong Kong was off 0.6 per cent.

Bitcoin futures for January ended at US$18,850.00 as the cryptocurrency launched in a major exchange Sunday, well above its US$15,000 initial price on the Chicago board options exchange (Cboe).

The Cboe launch marked the first opportunity for professional traders to invest in the digital unit on a traditional platform and is expected to be followed in a week by a rival listing on the Chicago Mercantile Exchange.

The spot price for Bitcoin quoted by Bloomberg - which is lower than the Cboe - rose slightly on Tuesday, sitting at US$16,930.

Key figures around 1645 GMT:

London - FTSE 100: UP 0.6 per cent at 7,500.41 (close)

Paris - CAC 40: UP 0.8 per cent at 5,427.19 (close)

Frankfurt - DAX 30: UP 0.5 per cent at 13,183.53 (close)

EURO STOXX 50: UP 0.5 per cent at 3,600.35

Tokyo - Nikkei 225: DOWN 0.3 per cent at 22,866.17 (close)

Hong Kong - Hang Seng: DOWN 0.6 per cent at 28,793.88 (close)

Shanghai - Composite: DOWN 1.3 per cent at 3,280.81 (close)

Euro/dollar: DOWN at US$1.1718 from US$1.1744

Pound/dollar: DOWN at US$1.3321 from US$1.3334

Dollar/yen: UP at 113.64 yen from 113.56 yen

Oil - Brent North Sea: down 90 cents at US$63.79 per barrel

Oil - West Texas Intermediate: DOWN 52 cents at US$57.47

Source: AFP/de