Stock markets diverge ahead of US data, Fed minutes

James PHEBY
 

European stock markets eased Wednesday, while prices on Wall Street were higher, with all eyes turned to the minutes of the US Federal Reserve's latest interest-rate meeting.

Investors were also looking ahead to new US economic data and a looming US-China summit, with Wall Street rising on the back of solid private-sector hiring data, dealers said.

In the eurozone, the Frankfurt and Paris stock markets gave up initial gains to end the session lightly in the red.

But in London, the FTSE-100 closed higher after better-than-expected growth in Britain's service sector.

"Wall Street opened higher on Wednesday with the Dow Jones breaking out to a two-week high," said Jasper Lawler of London Capital Group.

"A surprise jump in US private sector job growth reignited the reflation trade."

Nevertheless, "a little apprehension before Federal Reserve minutes and the meeting between US President Trump and Chinese Premier Xi capped some of the enthusiasm," he cautioned.

"Trump has openly labelled China a currency manipulator so his position is clear. The open questions are whether Trump follows through on his rhetoric, and if he does how China adjusts. Neither of these will be answered this week."

- Fed in focus -

Accendo Markets analyst Mike van Dulken also said investors were focusing on the Fed's March meeting minutes, "with investors looking out for clues about the likely path of... further rate hikes this year."

The US central bank raised its main interest rate by a quarter of a percentage point in March -- following a similar move in December.

Investors were also on edge ahead of the summit between Chinese President Xi Jinping and Donald Trump this week.

The two-day gathering in Florida comes after the US tycoon hit out at Beijing's trade policies and labelled it a currency manipulator, fanning fears of a trade war between the world's top two economies.

There are also geopolitical concerns linked to North Korea's growing nuclear programme, with Trump warning he would be prepared to sideline Beijing in dealing with the rogue state.

North Korean leader Kim Jong-Un raised tensions Wednesday by firing another ballistic missile into the Sea of Japan, the latest in a series of launches in recent months.

"It seems most folks are waiting on the meeting between Presidents Xi and Trump. And of course, non-farm payrolls," said Greg McKenna, chief market strategist at AxiTrader.

Oil prices continued their rise during European trading hours Wednesday following data that suggested US supplies were finally dwindling.

- Key figures at 1545 GMT -

New York - Dow: UP 0.7 percent at 20,827.27 points

London - FTSE 100: UP 0.1 percent at 7,331.68 (close)

Frankfurt - DAX 30: DOWN 0.5 percent at 12,217.54 (close)

Paris - CAC 40: DOWN 0.2 percent at 5,091.85 (close)

EURO STOXX 50: DOWN 0.3 percent at 3,472.58 (close)

Tokyo - Nikkei 225: UP 0.2 percent at 18,861.27 (close)

Hong Kong - Hang Seng: UP 0.6 percent at 24,400.80 (close)

Shanghai - Composite: UP 1.5 percent at 3,270.31 (close)

Euro/dollar: DOWN at $1.0654 from $1.0672

Pound/dollar: DOWN at $1.2475 from $1.2484

Dollar/yen: FLAT at 111.27 yen

Oil - Brent North Sea: UP 27 cents at $54.44 per barrel

Oil - West Texas Intermediate: UP 10 cents at $51.13

burs-spm/pdw

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