NEWS / Trade Policy

US data boost Europe bourses; dollar drops

LONDON: European stock markets ticked higher yesterday, helped by strong early trade on Wall Street where investors cheered a surprise drop in core US wholesale inflation last month.

The London FTSE 100 index of leading shares added 0.46% to close at 5,897.90 points. In Frankfurt, the Dax rose by 1.49% to 5,776.80, while in Paris the CAC 40 closed 1.35% higher at 5,115.02

The DJ Euro Stoxx 50 index of leading eurozone shares advanced by 1.27% to 3,766.38 points.

In New York, the Dow Jones Industrial Average was up 0.88% at 11,195.12 after earlier climbing more than 100 points in early trading.

The technology-laden Nasdaq index was 1.58% higher at 2,101.63, while the broad-market Standard & Poor??™s 500 index was up 1.01% at 1,280.97.

Headline US producer price (PPI) index rose 0.1% in July, new data showed yesterday, substantially slower than the 0.5% increase analysts had expected. The PPI rose 0.5% in June.

The core PPI reading, which excludes volatile food and energy prices, fell 0.3% in the month, well below the 0.2% gain economists had expected, the first decline since October, after rising 0.2% in June.

The data were well-received ahead of today??™s key US consumer price index (CPI) report and raised hopes that the US Federal Reserve may leave rates unchanged again in September.

In London, British inflationary pressures also moderated in July because of special summer offers for furniture and furnishings. British CPI rose by 2.4% in the the year to July, down from the nine-month high of 2.5% in June and in line with expectations.

On the corporate front, Diageo gained 18 pence to 962.5 on the London FTSE following positive comment on the group in the latest AC Nielsen US drinks survey.

Elsewhere, software firm Sage Group closed 5 pence higher at 225.5 reflecting strong early gains by the Nasdaq.

In Frankfurt, utilities were among the top performers on the DAX blue chip index.

RWE led large-caps higher, up 3.34% at 73.09 euros.

In Amsterdam, the AEX index added 1.14% to 461.25 points, the Swiss SMI was up by 1.64% at 8,055.32, in Madrid the Ibex-35 jumped by 0.74% to 11,991.3 and in Brussels the Bel-20 closed 1.30% higher at 3,907.05.

The dollar was a touch lower after news of benign US price pressures weighed on the chances of another US interest rate hike this year.

The euro climbed to $1.2786 in late European trading, compared with $1.2711 dollars late on Monday in New York.

The dollar stood at ??115.98, from ??116.70 on Monday.

The pound was being traded at $1.8951 form $1.8871 on Monday.

On the London Bullion Market, the price of gold rose to $625.50 per ounce, from $624.60 late on Monday. ??“ AFP