Europe stocks pause as investors mull ECB 'damp squib'


(MENAFN- AFP) Europe's main stock markets hit the pause button Friday as investors mulled the European Central Bank's reticence on future stimulus moves.

London's benchmark FTSE 100 index was flat in afternoon deals, after making earlier gains with British American Tobacco up 1.5 percent on news the group has launched a blockbuster $47-billion (43-billion-euro) bid for control of US peer Reynolds American.

In the eurozone, Paris stocks petered 0.48 percent lower and Frankfurt slipped 0.16 percent.

Milan stocks also slipped even though shares in troubled bank Monte Paschi di Siena skyrocketed ahead of presenting its new business plan on Monday.

The stock rose 10 percent in Friday afternoon trading, and has soared nearly 40 percent this week -- though it remains 80 percent below its price at the start of the year.

US stocks opened slightly lower Friday, but both Microsoft and McDonald's shares surged on solid earnings reports.

The Dow Jones Industrial Average fell 0.6 percent to 18,058.53 points about five minutes into morning trading.

The broad-based S&P 500 dropped 0.4 percent, while the tech-rich Nasdaq Composite Index slipped 0.2 percent.

- 'Damp squib' -

European equities had climbed higher on Thursday after the ECB opted against changing the size and scope of its bond-buying stimulus programme.

ECB chief Mario Draghi had dismissed reports the bank was considering gradually tapering its stimulus, but he added it was "unlikely" there would be an abrupt end to bond purchases.

"It was a bit of a damp squib yesterday," Will Hamlyn, senior equity investment analyst at Manulife Asset Management, told AFP.

"He (Draghi) kept his cards close to his chest and did not really let on anything, so everyone is wondering what he is going to say in December."

The ECB stimulus scheme, known as quantitative easing (QE), involves the purchase of public and private bonds at the rate of 80 billion euros per month, and is currently set to end in March 2017.

Asian markets diverged Friday following news of a strong earthquake in Japan.

"As often when there is an earthquake, the yen is bought" as Japanese investors repatriate funds, said Simon Pianfetti, a senior manager at the market solutions department at SMBC Trust Bank Ltd.

Computer-controlled orders are placed fast to react to news of earthquakes measuring greater than 6.0 magnitude or so, he told Bloomberg News.

Tokyo's Nikkei 225 index, which was up at the lunch break, slipped 0.30 percent to end a five-day winning streak.

Markets in Hong Kong were closed for the day as Typhoon Haima lashed the city, forcing schools and many businesses to shut.

- Key figures around 1345 GMT -

London - FTSE 100: DOWN 0.03 percent at 7,025 points

Frankfurt - DAX 30: DOWN 0.16 percent at 10,683

Paris - CAC 40: DOWN 0.48 percent at 4,518

EURO STOXX 50: DOWN 0.32 percent at 3,066

Tokyo - Nikkei 225: DOWN 0.3 percent at 17,184.59 (close)

Hong Kong - Hang Seng: UP 0.3 percent at 23,374.40 (Thursday close)

Shanghai - Composite: UP 0.21 percent at 3,090.94 (close)

New York - Dow: DOWN 0.6 percent at 18,058.53

Euro/dollar: DOWN at $1.0879 from $1.0928 Thursday

Dollar/yen: DOWN at 103.58 yen from 103.99 yen

Pound/dollar: DOWN at $1.2192 from $1.2254

Euro/pound: DOWN at 89.18 pence from 99.28 pence

Oil - West Texas Intermediate: DOWN 14 cents at $50.49 per barrel

Oil - Brent North Sea: UP 3 cents at $51.41


AFP

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