Europe's main stock markets ended narrowly mixed on Wednesday, with London sliding after a bigger-than-expected drop in British unemployment takes it close to the central bank's threshold to begin raising interest rates.
London's benchmark FTSE 100 ended the day down 0.12 percent at 6,826.33 points and Frankfurt's DAX 30 slid 0.10 percent to 9,720.11 points, but the CAC 40 in Paris edged up 0.03 percent to 4,324.98 points.
Milan gave up 0.19 percent and Madrid dropped 0.75 percent.
The euro dipped against the dollar.
"The FTSE is now entering the twilight zone where good news is bad news, as the surprise drop in unemployment has triggered fears the Bank of England will increase rates sooner than expected," said David Madden, market analyst at IG traders.
Britain's unemployment dropped faster-than-expected to a rate of 7.1 percent in the three months to the end of November, official data showed on Wednesday, further highlighting the nation's economic recovery.
It fell from a rate of 7.4 percent in the quarter through to the end of October, the Office for National Statistics (ONS) said in a statement. That was the lowest level for nearly five years, or since it stood at 6.8 percent in February 2009.
The Bank of England, under governor Mark Carney, has stated that it will consider raising its key interest rate from a record-low 0.50 percent once the unemployment rate falls to seven percent.
But while minutes of its last policy meeting released Wednesday showed the central bank saw "no immediate need to raise Bank Rate even if the seven percent unemployment threshold were to be reached in the near future," some bank's like Citi have begun to pencil in a rate hike before the end of this year.
The British pound rose on the prospect of higher interest rates. It climbed to 1.2227 euros from 1.2150, and to $1.6576 from $1.6476.
Meanwhile the European single currency dipped to $1.3557 from $1.3559 late on Tuesday in New York.
The dollar was flat at 104.32 yen.
Gold prices edged up to $1,241 an ounce from $1,238 Tuesday on the London Bullion Market.
Ruble slumps to 5-year lows
The Russian ruble has hit five-year lows this week against the central bank's foreign currency basket of dollars and euros -- a politically worrying trend for the Kremlin because of the accompanying rise in the cost of living.
It stood at 33.89 against the greenback and 45.99 against the single European currency in evening trading -- rates not seen since the worst months of Russia's 2008-2009 financial crisis.
President Vladimir Putin on Wednesday dismissed growing speculation about an imminent currency devaluation.
He said there has been no discussion about taking such a step with the central bank, which recently stopped spending up to $60 million a day on efforts to keep the ruble within a predetermined trading range as it moves toward a fully floating exchange rate by the start of next year.
The Lisbon stock exchange index fell 3.3 percent as bank shares fell sharply following a report that the government will not allow them to use tax credits to boost their capital ratios, meaning they may need to seek more money from investors.
Brokers said investors were also booking profits as bank shares have risen strongly as the country's economic prospects have brightened in recent months.
Shares in BCP bank tumbled 10.3 percent to 0.16 euros, Banif slumped 7.6 percent to 0.01 euros, BES fell 5.1 percent to 1.17 euros and BPI dropped 4.2 percent to 1.43 euros.
Asian markets closed mostly higher on Wednesday, with Tokyo reversing early losses after the Bank of Japan said it was winning the war against deflation and delayed injecting fresh stimulus into Asia's number two economy.
The yen saw a brief rally before easing again after Japan's central bank decided to refrain from adding to its already-huge asset buying programme following a two-day policy meeting.
US stocks traded mixed Wednesday following the latest batch of mediocre fourth quarter corporate earnings reports.
In afternoon trading, the Dow Jones Industrial Average declined 0.40 percent to 16,348.32 points, the broad-based S&P 500 dipped 0.08 percent to 1,842.31, while the tech-rich Nasdaq Composite Index gained 0.22 percent to 4,235.13.
Europe’s main stock markets ended narrowly mixed on Wednesday, with London sliding after a bigger-than-expected drop in British unemployment takes it close to the central bank’s threshold to begin raising interest rates.
London’s benchmark FTSE 100 ended the day down 0.12 percent at 6,826.33 points and Frankfurt’s DAX 30 slid 0.10 percent to 9,720.11 points, but the CAC 40 in Paris edged up 0.03 percent to 4,324.98 points.
Milan gave up 0.19 percent and Madrid dropped 0.75 percent.
The euro dipped against the dollar.
“The FTSE is now entering the twilight zone where good news is bad news, as the surprise drop in unemployment has triggered fears the Bank of England will increase rates sooner than expected,” said David Madden, market analyst at IG traders.
Britain’s unemployment dropped faster-than-expected to a rate of 7.1 percent in the three months to the end of November, official data showed on Wednesday, further highlighting the nation’s economic recovery.
It fell from a rate of 7.4 percent in the quarter through to the end of October, the Office for National Statistics (ONS) said in a statement. That was the lowest level for nearly five years, or since it stood at 6.8 percent in February 2009.
The Bank of England, under governor Mark Carney, has stated that it will consider raising its key interest rate from a record-low 0.50 percent once the unemployment rate falls to seven percent.
But while minutes of its last policy meeting released Wednesday showed the central bank saw “no immediate need to raise Bank Rate even if the seven percent unemployment threshold were to be reached in the near future,” some bank’s like Citi have begun to pencil in a rate hike before the end of this year.
The British pound rose on the prospect of higher interest rates. It climbed to 1.2227 euros from 1.2150, and to $1.6576 from $1.6476.
Meanwhile the European single currency dipped to $1.3557 from $1.3559 late on Tuesday in New York.
The dollar was flat at 104.32 yen.
Gold prices edged up to $1,241 an ounce from $1,238 Tuesday on the London Bullion Market.
Ruble slumps to 5-year lows
The Russian ruble has hit five-year lows this week against the central bank’s foreign currency basket of dollars and euros — a politically worrying trend for the Kremlin because of the accompanying rise in the cost of living.
It stood at 33.89 against the greenback and 45.99 against the single European currency in evening trading — rates not seen since the worst months of Russia’s 2008-2009 financial crisis.
President Vladimir Putin on Wednesday dismissed growing speculation about an imminent currency devaluation.
He said there has been no discussion about taking such a step with the central bank, which recently stopped spending up to $60 million a day on efforts to keep the ruble within a predetermined trading range as it moves toward a fully floating exchange rate by the start of next year.
The Lisbon stock exchange index fell 3.3 percent as bank shares fell sharply following a report that the government will not allow them to use tax credits to boost their capital ratios, meaning they may need to seek more money from investors.
Brokers said investors were also booking profits as bank shares have risen strongly as the country’s economic prospects have brightened in recent months.
Shares in BCP bank tumbled 10.3 percent to 0.16 euros, Banif slumped 7.6 percent to 0.01 euros, BES fell 5.1 percent to 1.17 euros and BPI dropped 4.2 percent to 1.43 euros.
Asian markets closed mostly higher on Wednesday, with Tokyo reversing early losses after the Bank of Japan said it was winning the war against deflation and delayed injecting fresh stimulus into Asia’s number two economy.
The yen saw a brief rally before easing again after Japan’s central bank decided to refrain from adding to its already-huge asset buying programme following a two-day policy meeting.
US stocks traded mixed Wednesday following the latest batch of mediocre fourth quarter corporate earnings reports.
In afternoon trading, the Dow Jones Industrial Average declined 0.40 percent to 16,348.32 points, the broad-based S&P 500 dipped 0.08 percent to 1,842.31, while the tech-rich Nasdaq Composite Index gained 0.22 percent to 4,235.13.
