European Central Bank President Mario Draghi, shown in March, signaled no new stimulus measures despite a weakening outlook (JULIEN WARNAND)
New York (AFP) – US and European stocks advanced Wednesday on dovish central bank announcements as markets eyed a key Brexit summit in hopes of another extension.
The European Central Bank kept interest rates at historic lows amid weakening economic forecasts but signaled no additional concrete plans to spur growth.
ECB president Mario Draghi told reporters in Frankfurt, “right now, it’s too early to decide” on various forms of aid to banks that could help the single currency bloc through a persistent soft patch, adding that “it was not an operational meeting.”
Later, minutes from the Federal Reserve’s March 19-20 meeting showed most policy makers believed the central bank should leave US interest rates untouched for all of 2019, citing economic risks brewing abroad.
The minutes fleshed out the bank’s decision at the March meeting to remove a projection of any rate hikes this year. That sentiment was further buttressed by US data that showed limited consumer inflation in March.
Bourses in New York, Paris and Frankfurt all rose.
The euro retreated against the dollar after Draghi’s remarks but later advanced following the Fed minutes.
The London stock market lagged behind its eurozone peers at the close as the pound strengthened, eating into profits of London-listed multinationals with major earnings in other currencies.
– Brexit extension? –
Sterling benefited from the view that a Brexit delay would reduce the chances of a “hard” British exit from the European Union, which would be expected to have dire economic consequences.
The currency shrugged off news that the British economy grew by just 0.2 percent in February from a month earlier.
EU leaders converged on Brussels for a summit with British Prime Minister Theresa May. Several officials signaled they would indeed be open to pushing back Brexit for several months if Britain undertakes to hold European elections in late May.
Without a fresh postponement, Britain is due to end its 46-year membership of the European Union at midnight on Friday with no deal, risking economic chaos on both sides of the Channel. May has said she will need until June 30 to ratify the withdrawal agreement.
Among individual companies, Airbus fell 1.7 percent in Paris on the first day under new chief executive Guillaume Faury, who took over barely a day after President Donald Trump threatened new tariffs on European goods over subsidies to Airbus.
Large US banks, including JPMorgan Chase, Wells Fargo and Citigroup, notched modest gains as CEOs from the companies withstood tough questioning on Capitol Hill.
While the banks were scrutinized over swelling executive pay and limited progress on appointing women and people of color to top jobs, there was little talk of meaningful new regulatory steps that could crimp profits.
– Key figures around 2040 GMT –
New York – Dow: UP less than 0.1 percent at 26,157.16 (close)
New York – S&P 500: UP 0.4 percent at 2,888.21 (close)
New York – Nasdaq: UP 0.7 percent at 7,964.24 (close)
London – FTSE 100: DOWN 0.1 percent at 7,421.91 (close)
Frankfurt – DAX 30: UP 0.5 percent at 11,905.91 (close)
Paris – CAC 40: UP 0.3 percent at 5,449.88 (close)
EURO STOXX 50: UP 0.2 percent at 3,424.65 (close)
Tokyo – Nikkei 225: DOWN 0.5 percent at 21,687.57 (close)
Hong Kong – Hang Seng: DOWN 0.1 percent at 30,119.56 (close)
Shanghai – Composite: UP 0.1 percent at 3,241.93 (close)
Pound/dollar: UP at $1.3091 from $1.3052 at 2100 GMT on Tuesday
Euro/pound: DOWN at 86.09 pence from 86.29 pence
Euro/dollar: UP at $1.1272 from $1.1263
Dollar/yen: DOWN at 111.00 yen from 111.14 yen
Oil – Brent Crude: UP $1.12 at $71.73 per barrel
Oil – West Texas Intermediate: UP 63 cents at $64.61 per barrel
Disclaimer: Validity of the above story is for 7 Days from original date of publishing. Source: AFP.