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27
June 2017
 |
| European stock (The Total Investment & Insurance Solutions) |
European stock markets
fell sharply Tuesday as the euro surged on comments from European Central Bank
President Mario Draghi. Shares in Alphabet Inc., Google's parent company will
be in focus later after the EU slapped its biggest-ever fine on the internet
giant for breaching antitrust rules with its online shopping service. The
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KEEPING SCORE: In Europe, Germany's DAX was down 0.5 percent at
12,704 while the CAC 40 in France fell 0.7 percent to 5,261. The FTSE 100 of
leading British shares was 0.2 percent lower at 7,435. Wall Street looked
poised for a soft open with Dow futures and the broader S&P futures down
0.1 percent. The Total Investment & Insurance
Solutions
DRAGHI SPEECH: The ECB president gave the euro a big lift after
displaying optimism over the future of the economy of the 19-country eurozone.
A raft of economic indicators has shown the single currency bloc to be gaining
momentum. While not going so far as to say the ECB was ready to rein back its
stimulus measures, Draghi did alter his language slightly to the extent that
traders think that a change of policy could be coming in the next few months.
Though saying the eurozone required "considerable" stimulus that was
perceived as a modest change in tone to the previous form of words of
"very substantial." The Total Investment & Insurance
Solutions
ANALYST TAKE: "While Draghi is among the more dovish policy
makers at the central bank, there has been persistent speculation that the ECB
will announce further reductions in asset purchases later this year and a more
positive assessment of the economy from the President may suggest he's willing
to back it," said Craig Erlam, senior market analyst at OANDA.
EURO SPIKES: That's certainly the conclusion in the currency
markets, where the euro surged 0.9 percent to $1.1277. The higher currency hurt
stocks as traders fretted over its impact on exports and on the prospect of
looser monetary policy in the future.
YELLEN'S TURN: How the euro ends the day could hinge on comments
later from Federal Reserve Chair Janet Yellen, who is due to address an
audience in London on a host of international matters. The Fed has been
gradually raising its key interest rate from record lows and hints about the
pace of more hikes will be of interest to investors. The
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GOOGLE FINE: Aside from the central bankers, the focus in the
markets has been on the whopping 2.42 billion-euro ($2.72 billion) fine the EU
has slapped on Google. The European Commission, which polices EU competition
rules, alleges Google elevates its shopping service even when other options
might have better deals and said the company "gave prominent placement in
its search results only to its own comparison shopping service, whilst demoting
rival services." Google has been given 90 days to stop or face further
fines of up to 5 percent of the average daily worldwide revenue of parent
company Alphabet. Google says it is considering an appeal. The
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ASIA'S DAY: Japan's Nikkei 225 rose 0.4 percent to 20,225.09 while
South Korea's Kospi added 0.1 percent to 2,391.95. Hong Kong's Hang Seng index
edged 0.1 percent lower to 25,839.99. China's Shanghai Composite Index added 0.2
percent to 3,191.20. Australia's S&P/ASX 200 slipped 0.1 percent to
5,714.20. The Total Investment & Insurance
Solutions
OIL: Benchmark U.S. crude rose 56 cents to $43.95 per barrel in
electronic trading on the New York Mercantile Exchange. Brent, the
international standard, gained 69 cents to $46.52 per barrel in London.The
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