Tuesday 28 January 2020

European shares open high as euro inches lower

Marc Jones

EUROPEAN shares opened higher today, bolstered by relatively robust earnings reports despite economic weakness, while the euro inched lower as uncertainty over how the euro zone will handle crises in Spain and Greece dragged on.

The FTSE Eurofirst index of top European shares was up 0.2 percent at 0820 GMT, helped by UK corporate results including from oil major Royal Dutch Shell.

Small gains by London's FTSE 100 and Frankfurt's DAX cancelled out minor dips in Paris and Madrid .

"Some of the results look to be reasonably robust, in light of the weak economic backdrop," said Central Markets senior trader Joe Neighbour.

Shell posted a smaller than expected fall in profits, sending its shares 0.9 percent higher, and investors also welcomed news from British bank Lloyds and telecoms group BT.

US stock futures were down 0.3 percent, suggesting a weak Wall Street opening following a flat performance on Wednesday when trade resumed after its first weather-related two-day closure since the late 19th century.

Away from stocks, risk appetite was mixed, with commodities such as copper up 0.4 percent, lifted by data from China showing the economy was perking up.

Oil hovered around $108.50 a barrel as investors focused on the possible effect on fuel demand from the damage caused by the Sandy storm along the U.S. East Coast.

The dollar gained 0.4 percent against the yen to 80.13 , approaching a four-month high of 80.38 hit last week.

The euro was pinned in the recent $1.28-$1.32 range, trading slightly weaker at $1.2934. The China-sensitive Australian dollar steadied around $1.0366.

Major currencies, like most markets, have been tethered in tight ranges for weeks due to uncertainty over Greece and Spain, the tight U.S. presidential election on Nov. 6 and the potential for the United States to run over a fiscal debt "cliff" early next year.

With Greece hammering out a deal to secure more bailout money later this month to avoid bankruptcy and no sign Spain is about to ask for euro zone help, European government bond markets were steady with benchmark German Bund futures barely changed at 141.75.


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