European equity markets gave back earlier gains and ended fairly flat in today’s trading session as it seems that markets run out of steam while mixed economic data from the US and Eurozone failed to provide a clear direction. The DAX and the London equity benchmark index ended fairly unchanged, after adding just 0.28 points today, while the CAC and IBEX indices managed to close on the positive territory.
The euro continues its strong rally against the US dollar, trading higher toward the 1.38 level, adding some support to commodity prices. On the macroeconomic front, US housing starts retreated to 880K in January from 953K in December, while building permits also fell by 5.4% as the recent freezing weather conditions in the US Northeast weighed on market sentiment.
In London, gains in base metals and industrial stocks managed to offset some losses in the banking and financial services sector. Fresnillo, Randgold, Mondi and Rio tinto gained between 1.21% and 2.48%. On the negative side, Barclays and Lloyds retreated sharply by 2.10% and 1.56%, respectively.
Tomorrow, it is a busy day on the macroeconomic front, with key economic data releases from the US and Eurozone which could bring further momentum across equity and commodity markets.
Investors will be keeping an eye on the release of the Markit Services and manufacturing PMI data from the US and Eurozone as well as HSBC manufacturing PMI data from China, while in the afternoon the main attention will turn to the US weekly jobless claims data, CPI inflation, and the leading index and Philly Fed business index that could provide a better insight into global economic conditions.