The European equity markets ended fairly mixed today with the German DAX index posting strong gains and ending 1.08% higher, while the CAC finished 0.27% also higher following strong German retail sales data and quite optimistic Eurozone’s unemployment data, which pushed the euro higher.
However, the London equity benchmark index failed to follow the uptrend across the other European equity markets and ended fairly unchanged on Friday, as weaker than expected economic data from the GfK consumer confidence as well as Nationwide house prices weighed on market sentiment.
In the US, the US economy grew by 2.4% in Q4 2013, below analysts’ expectations of 2.5%, adding some pressure to the US dollar. Furthermore, the University of Michigan survey showed market sentiment fell to 81.6 in February compared to 94 in January. Pending home sales also missed analysts’ estimates after showing a small increase of 0.1% in January versus expectations for a 1.8% rise.
The weaker than expected economic data verified hopes that the US Fed QE programme could stay for a longer period than initially expected, so the Dow Jones and S&P 500 Index rallied strongly and extended gains with the S&P 500 eyeing the 1870 area.
It has been a fairly volatile month in the markets, showing a strong rally in the US and European equities but declines in base metals and oil prices as the ongoing uncertainty in emerging markets continue to limit risk appetite. The euro continues to remain strong, trading above 1.38 against the US dollar, showing strong signs of improvement across the Eurozone.