Mar 22, 2008

International Markets - European markets recoup as Asian Markets end on a mix note

European markets recoup as Asian Markets end on a mix note - 18 Mar 2008

European shares bounce back on Tuesday morning behind gains for the financial sector as investors temporarily shrugged off fears about asset write-downs to focus on an expected sharp cut in U.S. interest rates.

Of national indexes, the U.K. FTSE 100 index rose 1.7% to 5,505.40, the German DAX 30 index climbed 1.6% to 6,280.60 and the French CAC-40 index jumped 1.3% to 4,487.88.

The gold prices stayed just under $1,000 an ounce while crude prices tracked a bit higher in the early European session, up 36 cents to $106.04 a barrel.

Looking at the economic data release today we have a consumer price index from United Kingdom accompanied with Retail Price Index. The Bank of Canada will also declare its core consumer price index for February. The evening is schedule to release some of the most awaited data for the month from the United States. It includes Building permits and National housing starts. However the focus of the markets will be on the wholesale inflation i.e. the producer price index followed by the Fed interest rate decision.

The Asian markets were remain mixed, with Shanghai-listed stocks extending losses into the fifth straight day on worries of continued monetary tightening by the central bank, and forcing a retreat for China-related shares in Hong Kong. But Japanese shares bucked the trend to end the morning session higher on bargain buying in beaten-down financial stocks such as Mitsubishi UFJ Financial Group. Australian and South Korean stocks were unsettled by losses for resource stocks after a pullback in crude oil and metal prices.

China's Shanghai Composite fell 3.9% to 3,668.89, on worries the central bank may announce measures to rein in inflation at the end of the National Party Congress meeting Tuesday. China's Premier Wen Jiabao promised to take forceful steps to damp inflation at an 11-year high, a sign that overheating remains the government's main concern even as financial-market turmoil threatens global growth.

In Hong Kong, the Hang Seng Index recovered with a loss of 1.4% to 21,384.61, after dropping below the 21,000-point level for the first time since August. The Hang Seng China Enterprises Index dropped 4.1% to 10,580.18, as the weakness in Shanghai spread.