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European Shares Edge Ahead, Asia Drop

European Shares Edge Ahead, Asia DropEuropean Shares Edge Ahead, Asia Drop

European shares were slightly higher on Thursday with gains in healthcare and oil stocks only in part offset by some stocks such as Daimler going ex-dividend.

The pan-European FTSEurofirst 300 index was up 0.3%, adding to gains seen on Wednesday when the region’s markets rebounded from six week lows hit earlier in the week after weak economic data. Despite the slight gains, sentiment remained fragile, Business Insider reported.

“What markets really would need are more positive global economic data ... indicating a pick up in economic activity especially in the Eurozone and the US,” City of London Markets trader Markus Huber said in a note.

Healthcare stocks were the top sectoral gainers for a second session with a rise of 1.2% after the termination of the mega Pfizer/Allergan merger deal fuelled talk of other consolidation activity in the sector.

Shire rose 1% after the UK drugmaker said it expected its deal to buy American drugmaker Baxalta to proceed as expected, while elsewhere in the sector Roche gained 1% and Astrazeneca rose more than 2%.

Oil sector stocks rose 1.1% as crude futures rose on a raft of supportive indicators on Thursday.

German carmaker Daimler fell more than 3%. Among other companies going ex-dividend were Skanska which fell 6.9%, making the stock the biggest faller on the FTSEurofirst, and Pearson which slipped 5.5%.

Asian shares extended losses to three-week lows on Friday, while the yen soared to a 17-month high against the dollar as investors bet Japan would be hard pressed to drive down its currency in the face of widespread foreign opposition, Reuters reported.

MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.5%, heading for a weekly drop of 1.8%.

Japan’s Nikkei pared earlier losses to near-two-month lows to trade 0.6% lower, with financials under pressure. It’s on track for a decline of 3.1% for the week.

China’s Shanghai Composite index slid 0.9%, poised for a similar drop for the week. The CSI 300 was down 0.8%, set for a 1.2% weekly decline. Hong Kong’s Hang Seng slipped 0.7%, headed for 1.9% loss for the week.

Lower yields undermined the dollar, given that prospects of higher US yields were the main attraction behind the currency’s firmness.

Investors instead bought back the yen, which had been long under pressure due to the Bank of Japan’s massive monetary easing.

“Japan’s move towards negative rates, amid a general inability to create substantial nominal GDP and therefore inflation, is now resulting in a wave of JPY buying,” Chris Weston, chief market strategist at IG in Melbourne, wrote in a note.

Financialtribune.com