Saturday 23 September 2017

European bourses mixed as poor UK economic data hits sterling

Data showing an unexpected contraction in British industrial output in May put sterling on the defensive from the start of European trade and the currency extended its losses against the dollar after a strong US labour market report. Stock photo: Depositphotos
Data showing an unexpected contraction in British industrial output in May put sterling on the defensive from the start of European trade and the currency extended its losses against the dollar after a strong US labour market report. Stock photo: Depositphotos

Reuters

European stock markets delivered a mixed and overall lacklustre performance yesterday, as German government bond yields rose to 18-month highs, lifting the euro, but dampening shares.

Sterling was set for its worst week in four yesterday after below-forecast output and trade data capped a run of downbeat readings of Britain's economy, adding to questions over the Bank of England's shifting interest rate stance.

Data showing an unexpected contraction in British industrial output in May put sterling on the defensive from the start of European trade and the currency extended its losses against the dollar after a strong US labour market report.

"Given the soft data this week, I think a UK rate hike is increasingly becoming a 2018 story," said Viraj Patel, an FX strategist at ING in London.

Strategists at Nomura, however, have predicted the BoE will hike rates in August.

Bets that some of the world's major central banks are moving closer to unwinding ultra-loose monetary policies have roiled markets this week as European Central Bank minutes showed policymakers are open to tightening.

The pan-European FTSEurofirst 300 index lost 0.21pc and MSCI's gauge of stocks across the globe gained 0.10pc.

Ireland's ISEQ Overall Index edged 0.35pc higher.

Movers included Bank of Ireland, which advanced 2.5pc to 25 cent, while AIB rose 1pc to €5.01. Shares in Ryanair advanced 1.8pc to €18.44, keeping them within touching distance of recent records.

Green REIT declined 1.4pc to €1.40m while insulation maker Kingspan shed 1.1pc to €29.76.

The UK's FTSE-100 rose 0.2pc and Germany's DAX was unchanged.

France's CAC-40 dipped 0.1pc by the end of the session.

Irish Independent

Also in Business