NEWS / Indicators

Euro marts dip ahead of ECBrate decisi

LONDON: European stock markets closed lower yesterday amid cautious trading before interest rate decisions later in the week, dealers said.The London FTSE 100 index of leading shares shed 0.78% to 5,928.30 points, in Frankfurt the Dax slipped by 0.41% to 5,681.97 and in Paris the CAC 40 closed 0.38% lower at 5,009.42.

The DJ Euro Stoxx 50 index of leading eurozone shares declined 0.50% to 3,691.87 points.

US stocks struggled to notch up gains yesterday as oil prices rose in reaction to the unrest roiling the Middle East, traders said.

The Dow Jones Industrial Average was down 0.24% at 11,192.96, while the technology-weighted Nasdaq index was 0.25% lower at 2,088.86.

The Standard & Poor??™s 500 index was down 0.24% at 1,275.53.

In Europe, markets were awaiting rate decisions by the European Central Bank and Bank of England on Thursday. While the ECB was expected to increase eurozone borrowing costs by a quarter-point to 3.0%, the picture was less clear for the Bank of England.

Some analysts believe that BoE policymakers will hike borrowing costs by a quarter point to 4.75% because of strong British economic growth and inflation data over the past few weeks.

A higher interest rate would increase costs for companies trading on the FTSE 100. Last week, the index recorded its biggest weekly gain for more than three years - of 4.46% - owing to strong company results.

One of the biggest fallers was Alliance Boots, whose shares traded for the first time after completion of a multi-billion-pound British merger between health and beauty retailer Boots and pharmacy chain Alliance UniChem.

The dollar fell to its lowest levels in nearly three weeks against the euro, undermined by US economic data on Friday which suggested a pause in US interest rates, dealers said.

The euro rose to $1.2765 in late European trading, compared with $1.2759 late in New York on Friday. It rose briefly to $1.2783, its highest level since July 12.

The dollar dipped to ??114.49 from ??114.63 late on Friday.

The dollar 1.2317 Swiss francs (1.2326). The pound was being traded at $1.8682 (1.8631). ??“ AFP