World Economy

European Equities Hit Pause Button

European Equities Hit Pause ButtonEuropean Equities Hit Pause Button

Europe’s major stock markets paused on Tuesday as investors digested key economic data and waited for US bank earnings, dealers said.

London turned flat as investors monitored news that annual British inflation jumped in September to 3%—the highest level in more than five years, AFP reported.

Frankfurt also flatlined despite news that German investor confidence inched upwards in October, according to the ZEW institute’s headline barometer.

Paris meanwhile dipped 0.1% and Madrid shed 0.3% amid ongoing uncertainty over the Catalan independence crisis and ahead of US industrial production data.

“European shares are trading little changed ... as markets are awaiting data and earnings news out of the US later  in the day,” said City of London Markets trader, Markus Huber.

US banks Goldman Sachs and Morgan Stanley are scheduled to post their third-quarter results.

“Whilst economic data currently seem to only have a limited impact on markets, mainly because most major central banks have laid out clearly their plans for the coming months, corporate data is a different matter,” Huber said.

“A sudden declining earnings, or earnings outlook picture, would certainly pose a problem for markets with traders unlikely to keep their current risk exposure for too long.

“Overall sentiment remains positive with a pickup in volatility looking rather unlike for now,” he said.

Meanwhile, Asian equities diverged Tuesday as traders took a breather after recent strong gains, with more records on Wall Street unable to spur strong buying.

Tokyo however rose 0.4% to chalk up an 11th straight gain. That put the benchmark Nikkei at a new 21-year high, as upbeat Japanese corporate earnings outweighed concerns about overheating.

While optimism remains over the world economy and corporate earnings—helping push global markets to all-time or multi-month highs—investors moved carefully as they await the next catalyst.

The Australian stock market is advancing. In late-morning trade, the benchmark S&P/ASX 200 Index is adding 36.70 points or 0.63% to 5,883.50, off a high of 5,885.00 earlier. The broader All Ordinaries Index is up 34.70 points or 0.59% to 5,951.90. On Monday, the market had climbed to a five-month high.

In the mining space, BHP Billiton is advancing more than 1%, while Fortescue Metals is down 0.2%. Among gold miners, Newcrest Mining is advancing almost 1% and Evolution Mining is rising more than 2%.

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