European markets tracked Asian stocks lower Thursday, after the Federal Reserve’s policy decision was deemed lees dovish that expected.
The U.S. dollar hovers around its two-week high, while U.S. bond yields edged higher on prospects of an earlier-than-thought taper for the Central Bank’s unprecedented stimulus.
- Stoxx 600 lost 0.72 percent or 2.33 points to 320.58
- Stoxx 50 dropped 0.96% to 3018.11 . As of 03:28 a.m. EST.
On Thursday, Markit research group said Germany`s manufacturing purchasing managers` index rose to a 29-month high of 52.5 in November, from a final reading of 51.7 the previous month, exceeding expectations for a reading of 52.0.
Germany`s services PMI rose to 54.5 this month, from 52.9 in October, above expectations for a reading of 53.0.
Eurozone zone Manufacturing composite edged higher to 51.5 from 51.3, matching analysts’ estimates.
Eurozone PMI services index dropped to 50.9 from 51.6, failing estimates of 51.9. The PMI composite came at 51.5, failing estimates that called for a rise to 52.0 form 51.9.
Minutes from the Fed’s latest policy meeting showed that the central bank would likely start tapering off its bond purchases in “coming months” if the job market improved further. Fed members also weighed the possibility of slowing the purchases even without clear evidence of a strengthening job market.
The Fed’s $85 billion monthly bond purchases have kept interest rates low to spur spending and growth but also sent a wave of investment into stocks in search of higher returns.
It said reduction of the bond purchases could begin as early as January , contrary to some expectations that the stimulus could stay until March at least.
The Fed’s stimulus, in its various guises, has helped shore up risky assets such as stocks around the world and emerging market currencies, over the past few years as the money created has been recycled through financial markets.
Data from China showed slower growth in the manufacturing sector also hampered the investing mood. France`s purchasing managers` index pointed to a slowdown.
The preliminary 50.4 reading in November for the Purchasing Managers’ Index released by HSBC Holdings Plc and Markit Economics compared with a 50.8 median estimate
Japanese shares bucked the downward trend, with the benchmark Nikkei climbing nearly 2 percent after the yen hit a two-month low versus the dollar and the Bank of Japan kept its ultra-easy monetary policy unchanged, citing signs of economic recovery and rising core consumer price inflation, which is now in the range of 0.5-1 percent.
Financial stocks were also mostly lower, as Barclays slipped 0.27% and HSBC Holdings declined 0.70%, while the Royal Bank of Scotland shed 0.33%. Lloyds Banking over performed however, up 0.32%.
Shares of Societe Generale SAfell 1.4% in Paris and Mediobanca SpA lost 1% in Milan. Among miners, heavyweight Rio Tinto PLC gave up 0.9%.
-The British FTSE 100 lost 0.51% or 34.18 points to 6646.90
-The French CAC 40 lost 1.02% or 43.68 to 4224.69
-Frankfurt’s DAX 30 lost 0.79% or 73.06 points to 9129.01
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