(MENAFN- Gulf Times) World stocks nudged higher yesterday in cautious trading on the eve of a US Federal Reserve decision, dealers said, with European gains capped by news of plunging German investor confidence.
Equities were also wobbly over a continuing sell-off of Facebook shares, while concerns of a possible trade war sparked by President Donald Trump's announcement on tariffs also weighed.
In Germany, a survey of 220 analysts and investors from the ZEW institute gave a reading of 5.1 points — a slump of 12.7 points from February's level and far below the 13.1 forecast by analysts.
The last time confidence among financial players was so low was in the months after Britain's June 2016 vote to quit the European Union.
London stocks gained ground after data showing a slowdown in British annual inflation in February which analysts said took some pressure off the Bank of England to raise rates and led to a weakening of the pound.
In London, the FTSE 100 closed up 0.3 % to 7,061.27 points; Frankfurt — DAX 30 ended up 0.7% to 12,307.33 points and Paris — CAC 40 rose 0.6% to 5,252.43 points yesterday.
'Small gains in UK and European markets have not put much of a dent in yesterday's losses, noted IG analyst Chris Beauchamp.
An alleged massive data breach at Facebook fuelled fears of a regulatory crackdown on the technology sector.
Reports said Cambridge Analytica, a firm hired by Trump's 2016 presidential campaign, stole data from 50mn Facebook user profiles to help design software to predict and influence voters' choices.
'The scandal surrounding Facebook in relation to Cambridge Analytica has dented the tech sector as a whole, and the longer the story looms, the more pressure is likely to be applied to the industry, CMC Markets UK analyst David Madden said.
Facebook stock lost another 5% on the Nasdaq yesterday after plunging 6.8% the previous day.
European lawmakers demanded answers from Facebook Tuesday and Britain's information watchdog sought a warrant to search the London offices of the analysis firm involved.
The company's 'silence speaks volumes and we suspect Facebook are preparing a robust response, said Jasper Lawler at London Capital Group.
'The tech giant's fast-and-loose handling of private data will feed the niggling doubt investors have had all along that the big US tech stocks cannot keep going up so rapidly forever, he said.
Investors are also keeping a close watch on the Fed's meeting this week, seeking clues about its timetable for tightening monetary policy.
'The start of the Fed's monetary policy meeting that will conclude today with a rate decision is gathering attention, Charles Schwab analysts said.
Opinion is split on the number of rate rises it will announce this year, with some forecasting three and others four.
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