European stock markets struggled Friday, the last trading day of January, as dealers found little news to whet their appetites amid a mixed performance on Wall Street.
The British FTSE 100 index slipped 0.47 percent to 4,390.7 points, the German DAX 30 index lost 0.91 percent to 4,058.60 points and the French CAC 40 closed 0.65 percent lower at 3,638.44 points.
The DJ Euro Stoxx 50 index of leading eurozone shares fell 0.73 percent to 2,839.13 points.
The euro stood at US$1.2456.
Markets took a breather towards the end of a month that has seen the DAX 30 and CAC 40 rally by over two percent, while the FTSE 100 has lost 1.9 percent.
Many analysts still subscribe to the idea of the "January barometer," which decrees that "as January goes, so goes the rest of the year."
Anais Faraj, European equity strategist at Nomura Securities, is not one of them.
But he said: "There is a strong seasonal pattern. If you look at the US and Europe, really since 1970, on average January has delivered a reasonably good return."
However, if history is any guide, investors could be in for disappointment over the next few weeks.
"On average over the last 30 years February has been very, very weak. It's one of the weakest months of the year," said Faraj.
"I think we're going to see a sharp drop [in the stock market] into February and then by the end of February the market will pick up," he predicted.
There was little news from New York to galvanize markets in Europe on the last trading day of January.
US stocks were mixed as European markets closed, with investors still trying to fathom the implications of a subtle change in the tone of the US Federal Reserve's stance on monetary policy which sparked a big sell-off a day earlier.
Shares in French Internet and telecommunications firm Iliad debuted on the Paris stock exchange with a 30.37 percent jump in value to 21.25 euros.
In Amsterdam, the AEX index slipped 0.26 percent to 353.31 points, the Swiss SMI was down 0.55 percent at 5,736.4 points, in Milan the Mib 30 lost 0.92 percent to 27,694 points, in Madrid the Ibex-35 shed 1.04 percent to 7,929.9 points and in Brussels the Bel-20 closed up 0.08 percent at 2,383.76 points.
The US dollar was trading at NT$29.7 at 10am today on the Taipei Foreign Exchange, as the New Taiwan dollar gained NT$1.364 from the previous close last week. The NT dollar continued to rise today, after surging 3.07 percent on Friday. After opening at NT$30.91, the NT dollar gained more than NT$1 in just 15 minutes, briefly passing the NT$30 mark. Before the US Department of the Treasury's semi-annual currency report came out, expectations that the NT dollar would keep rising were already building. The NT dollar on Friday closed at NT$31.064, up by NT$0.953 — a 3.07 percent single-day gain. Today,
‘SHORT TERM’: The local currency would likely remain strong in the near term, driven by anticipated US trade pressure, capital inflows and expectations of a US Fed rate cut The US dollar is expected to fall below NT$30 in the near term, as traders anticipate increased pressure from Washington for Taiwan to allow the New Taiwan dollar to appreciate, Cathay United Bank (國泰世華銀行) chief economist Lin Chi-chao (林啟超) said. Following a sharp drop in the greenback against the NT dollar on Friday, Lin told the Central News Agency that the local currency is likely to remain strong in the short term, driven in part by market psychology surrounding anticipated US policy pressure. On Friday, the US dollar fell NT$0.953, or 3.07 percent, closing at NT$31.064 — its lowest level since Jan.
The Financial Supervisory Commission (FSC) yesterday met with some of the nation’s largest insurance companies as a skyrocketing New Taiwan dollar piles pressure on their hundreds of billions of dollars in US bond investments. The commission has asked some life insurance firms, among the biggest Asian holders of US debt, to discuss how the rapidly strengthening NT dollar has impacted their operations, people familiar with the matter said. The meeting took place as the NT dollar jumped as much as 5 percent yesterday, its biggest intraday gain in more than three decades. The local currency surged as exporters rushed to
PRESSURE EXPECTED: The appreciation of the NT dollar reflected expectations that Washington would press Taiwan to boost its currency against the US dollar, dealers said Taiwan’s export-oriented semiconductor and auto part manufacturers are expecting their margins to be affected by large foreign exchange losses as the New Taiwan dollar continued to appreciate sharply against the US dollar yesterday. Among major semiconductor manufacturers, ASE Technology Holding Co (日月光), the world’s largest integrated circuit (IC) packaging and testing services provider, said that whenever the NT dollar rises NT$1 against the greenback, its gross margin is cut by about 1.5 percent. The NT dollar traded as strong as NT$29.59 per US dollar before trimming gains to close NT$0.919, or 2.96 percent, higher at NT$30.145 yesterday in Taipei trading
RSS