NEWS / Indicators

Euro shares close lacklustre on Fed

LONDON: European stock markets closed mixed yesterday, with investors weighing up comments from US Federal Reserve chief Ben Bernanke and eyeing developments in the auto sector, dealers said.

The London FTSE 100 index of leading shares fell 0.12% to close at 5,770.9 points, in Paris the CAC 40 gained 0.38% to 4,865.04 while in Frankfurt the Dax added 0.12% to 5,545.82.

The DJ Euro Stoxx 50 index of leading eurozone shares gained 0.02% to 3,586.46 points.

US shares fluctuated wildly yesterday as Federal Reserve chairman Ben Bernanke was grilled for a second day on the country??™s economic performance by congressional lawmakers.

Shares had surged on Wednesday in the US and Europe after Bernanke said that inflation and economic growth were slowing, leading many investors to believe that the central bank might be close to suspending its rate-hiking cycle.

In mid morning trading, the Dow Jones Industrial Average was down 0.09% at 11,001.34 while the Nasdaq tech-laden index was down 0.67% to 2,066.74.

The auto sector in Europe and the US was in focus after US giant Ford reported a net second quarter loss of $123mn ($97mn) and promised deeper efforts in the next two months to turn its ailing operations around.

In New York, Ford??™s stock was trading 1.31% lower at $6.25.

In Germany, shares in German-US giant DaimlerChrysler fell 0.52% to 38.16 euros, shares in BMW dropped 0.16% to 38.47 euros while Volkswagen gained 0.19% to 53.21 euros.

DaimlerChrysler is to dissolve its Smart car business, the maker of small vehicles for urban users, and fold it into its Mercedes company. The Smart car business had previously stood as a separate legal entity.

BMW named Norbert Reithofer, the current head of production at the group, to replace outgoing chairman Helmut Panke from September 1.

In France, shares in Renault fell 1.98% to 81.50 euros, hit by a downgrade by analysts at Morgan Stanley.

Elsewhere in Europe, in Amsterdam, the AEX index rose by 0.29% to 438.72 points, the Swiss SMI was up 0.74% at 7,659.57, in Milan the SP/Mib fell 0.26% to 35,887, in Madrid the Ibex-35 rose 0.18% to 111,446.4 and in Brussels the Bel-20 closed 0.72% higher at 3,686.74.

The pound gained ground, bolstered by renewed expectations of a Bank of England interest rate hike before the end of the year owing to a string of robust British data.

Sterling traded for $1.8501 in late European deals, up from $1.8416 in New York late on Wednesday.

The euro rose to $1.2639 from $1.2588 late on Wednesday, while the dollar eased to ??116.76 from ??116.82. ??“ AFP