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Europe, Asia Shares Steady

Europe, Asia Shares SteadyEurope, Asia Shares Steady

European shares steadied early on Wednesday, helped by some clam returning to bond markets and by strong results from France’s Vivendi and Britain’s SABMiller.

Media company Vivendi rose 2 percent after posting a rise in first-quarter profit and saying it planned to buy the rest of pay-TV operator Canal Plus’ SECP unit, Reuters reported.

The pan-European FTSEurofirst 300 index was up 0.2 percent at 1,578.41 points at 0713 GMT, mirroring a fall in yields across the main eurozone government bonds.

The FTSEurofirst shed 1.3 percent in the previous session and is down 4.5 percent from a 14-1/2 year high hit last month.

Investors were also digesting mixed economic data from the euro zone’s two largesteconomy, with France growing faster than expected in the first quarter while Germany suffered a bigger-than-forecast slowdown.

Markets in Asia stabilized Wednesday with bonds recovering and stocks mostly flattish, as recent pressure from a global bond selloff subsided.

Most major stock benchmarks, including the Hang Seng Index and the Nikkei Stock Average, were fractionally changed, after US stocks pared steep losses and US Treasury bonds rallied Tuesday.

 destabilized markets

Asia’s recovery came after a selloff Tuesday of stocks in India and Thailand, currencies in Southeast Asia and bonds broadly. Rising bond yields, particularly in Europe, have destabilized markets globally in recent weeks.

While some selling is due to liquidation of positions built in anticipation of the European Central Bank’s bond-buying program, the Greece debt situation and higher crude oil prices are prompting investors to cut their bond-holdings, analysts said. Higher interest rates push up corporate and household borrowing costs, factors seen as negative for stocks.

Signs that Asia was shaking off those jitters Wednesday included a drop in the yield on Indonesian 10-year government bonds, down 0.16 percentage points from a five month high. Yields move inversely to prices. Yields on Japanese government bonds were stable after jumping to a two-month high Tuesday.

The Nikkei finished up 0.7%, with losses limited by several decent earnings reports. Any downside is supported by respectable Japanese earnings results and expectations for the Bank of Japan stock buying, said Hiroichi Nishi, general manager of equity at SMBC Nikko Securities.

 

Financialtribune.com