LONDON: Europe’s main stock markets mostly steadied on Thursday as traders focused on European and US inflation data and what it means for future central bank policy on interest rates.
The annual rate of inflation in the eurozone remained unchanged in August as there was a smaller drop in energy prices, the EU’s official statistics agency said.
Consumer prices reached 5.3 percent this month, although there was also a slowdown in the rise of food and drinks costs.
Analysts said the data increased the chance of the European Central Bank deciding against a further hike to interest rates in the eurozone next month.
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That in turn weighed on the euro.
Later Thursday sees the release of the Federal Reserve’s preferred gauge of inflation, the personal consumption expenditures (PCE) price index, which will be followed by readings on factory activity and non-farm payrolls for August.
In Asia, China revealed that factory activity shrank again this month while services weakened, which will likely pile further pressure on authorities to press ahead with measures to kickstart the sputtering economy.
Officials have announced a series of pledges to help various sectors – particularly the property industry – and there is an expectation that more is on the way.
In the latest measure, local reports Thursday said the central bank is drawing up policies that will make it easier for private firms, including developers, to access funding.
However, analysts say the only thing that will appease investors is a wide-ranging “bazooka” of big spending.
“There remains an undercurrent of optimism regarding additional policy measures anticipated for China,” said SPI Asset Management’s Stephen Innes.
“Nevertheless, tenacious economic apprehensions concerning China persist. The current perspective on China’s growth trajectory has become increasingly fixated on the pivotal policy choices that Chinese authorities must navigate.”
Fresh data showing the country’s manufacturing sector contracted for a fifth straight month in August added to the arguments for more help.
And the need to provide support to the embattled real estate sector was highlighted Wednesday when industry giant Country Garden reported losses of about $6.7 billion for the first half of the year and warned of possible default.
The company’s cash flow problems have ignited fears that it could collapse and spread turbulence through China’s economy and financial system.
On the corporate front, shares in UBS jumped more than five percent after the bank giant said it would fully absorb the Swiss unit of its recently-swallowed rival Credit Suisse.
Switzerland’s largest bank, which was strongarmed into a takeover of its closest domestic rival in March to keep it from going under, said it aimed to complete most of the integration by the end of 2026 following cost cuts of more than $10 billion.
Key figures around 1100 GMT
London - FTSE 100: FLAT at 7,472.58 points
Frankfurt - DAX: UP 0.6 percent at 15,983.46
Paris - CAC 40: DOWN 0.1 percent at 7,354.64
EURO STOXX 50: UP 0.1 percent at 4,319.07
Tokyo - Nikkei 225: UP 0.9 percent at 32,619.34 (close)
Hong Kong - Hang Seng Index: DOWN 0.6 percent at 18,382.06 (close)
Shanghai - Composite: DOWN 0.6 percent at 3,119.88 (close)
New York - Dow: UP 0.1 percent at 34,890.24 (close)
Euro/dollar: DOWN at $1.0877 from $1.0925 Thursday
Pound/dollar: DOWN at $1.2683 from $1.2719
Dollar/yen: DOWN at 145.90 yen from 146.23 yen
Euro/pound: DOWN at 85.76 pence from 85.87 pence
Brent North Sea crude: UP 0.7 percent at $86.43 per barrel
West Texas Intermediate: UP 0.6 percent at $82.08 per barrel
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