The Gulf Time Newspaper One of the finest business newspapers in the UAE brought to you by our professional writers and editors.
London / AFP
Europe’s main stock markets forged higher on Tuesday as investors reacted to a surprise dip in British inflation and shrugged off slower-than-expected German economic growth. Britain’s annual inflation rate eased to 0.9 percent in October compared with 1.0 percent a month earlier, despite a Brexit-triggered slump in the pound lifting imported raw material costs for British firms.
The figure took analysts, who had pencilled in a slight increase, by surprise and helped push the pound lower. “Stocks were on the rise on Tuesday morning as government bond yields pulled back from recent gains and industrial metals prices slipped,†analyst Jasper Lawler, of CMC Markets, said in a note to investors.
“Gains in the FTSE 100 accelerated mid-morning after data showed inflation unexpectedly slipped in October, taking the British pound lower in a boost to multinational shares.†Shares in London’s benchmark FTSE won 1.0 percent in midday trading.
But UniCredit Research economist Daniel Vernazza said the easing in inflation was “just a blip in what is a strongly upward trendâ€. Traders also had a clutch of earnings reports to digest. Shares in British mobile phone giant Vodafone were little changed, up 0.02 percent at 204.65 pence, after the company said its first-half net loss doubled to more than 5.0 billion euros due to a huge writedown for its Indian unit.
ASIAN EMERGING MARKETS UP
Most Asian emerging markets rose after the previous day’s heavy losses but traders remained on edge over Trump’s plans for global trade agreements. While shares in developed economies have rallied and safe-haven sovereign debt prices have fallen, many trading floors in Asia have taken a hit recently over worries Trump will throw up tariffs to the world’s biggest economy.
His plans for huge spending and tax cuts at home have also fanned expectations the Federal Reserve will hike interest rates more sharply than initially planned, sending the dollar soaring and fuelling an exodus from emerging markets. However, after a two-day retreat on most regional bourses, there was a tentative recovery with Manila up 0.3 percent, Jakarta 0.5 percent higher and Bangkok added 0.2 percent. Tokyo, though, was marginally lower, having surged more than eight percent to a nine-month high since Thursday on the back of a rally in the dollar against the yen.