Sideways trading activity in European equities

Wednesday, May 28, 2014

European equity markets fluctuated strongly in today’s session, while mixed economic data from Eurozone failed to provide a clear direction to the markets. The CAC, DAX and London equities ended fairly flat on the day, while the euro retreated further breaching below 1.36 against the US dollar.

On the macroeconomic front, Eurozone, business climate index increased to 0.37 in May compared to a revised 0.023 in April, but consumer confidence fell to 7.1. In Germany, the unemployment rate remained unchanged at 6.7% in May, in line with analysts’ expectations, while import prices fell unexpectedly by 0.3% in April.

The US dollar rallied strongly with the USD index currently trading at a 8-week high at 80.5, adding pressure to most commodity prices.

In LME, base metal prices slid lower. Nickel retreated sharply by 1.8% at 19,200, reversing some of the recent gains, while Lead and Zinc have also posted fresh losses in today’s session, trading more than 0.6% lower. Thus, mining stocks were under pressure in London today with Rio Tinto and Anglo American falling by 1.7% and 1.9%, respectively. 

LME Nickel

LMNIDS03 Comdty (LME NICKEL    3 2014-05-28 16-40-14

On the upside, Smith & Nephew surged more than 3.8% in London today, following a Financial Times report about a possible takeover from Stryker Corporation. However, Stryker said in an announcement today that it is not planning to make a takeover bid for Smith & Nephew, denying any recent rumours.

Tomorrow, investors will be keeping an eye on the release of the US GDP data as well as weekly jobless claims and pending home sales figures.      

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