EU stock markets weaken
Europe's stock markets weakened Tuesday on growing speculation that the US Federal Reserve.
LONDON (AFP) - Europe s stock markets weakened Tuesday on growing speculation that the US Federal Reserve could begin withdrawing its economic stimulus soon, dealers said.
In late morning deals, London s FTSE 100 benchmark index shed 0.27 percent to 6,710.50, the Paris CAC 40 fell 0.31 percent to 4,276.89 points, and Frankfurt s DAX 30 dipped 0.26 percent to 9,084.03 compared with Monday s close.
The euro slid to $1.3370, down from $1.3407 late in New York on Monday. The dollar firmed to 99.69 yen from 99.20 yen.
European equities fell also as investors shrugged off more record gains overnight on Wall Street and a largely upbeat session in Asia.
"US economic fundamentals appear better placed, helping equities and the US dollar but speculation that we are in for tapering next month is mounting, curbing some of the enthusiasm in other parts of the world," said analyst Joe Rundle at traders ETX Capital.
Expectations are growing that the Federal Reserve could start tapering its $85-billion-a-month asset purchase programme next month or in January.
The Fed has said any draw-down -- seen as a plus for the dollar -- hinges on signs of a firm recovery. There was more evidence last week that the US economy is on the right track with positive jobs numbers and better-than-expected growth data.
"More and more market players expect the Fed to start tapering the programme by the end of the year," Daisuke Karakama, market economist at Mizuho Bank, told AFP.
Sterling fell after news that Britain s 12-month inflation rate slowed to 2.2 percent in October, the lowest level for more than a year, compared with 2.7 percent in September. Expectations had been for a reading of 2.5 percent.
In reaction, the euro rose to 84.26 pence against the British pound, which was lower at $1.5865.
On the London Bullion Market, the price of gold slid to $1,279.84 an ounce from $1,282.50 on Monday.
In company news, Vodafone shares rallied 1.56 percent to 230.9 pence after the British mobile phone giant revealed it surged back into first-half profit on a huge tax credit.
Earnings after tax stood at 17.95 billion ($28.6 billion, 21.4 billion euros) in the six months to September 30, boosted by a tax credit of almost 15 billion, it said in a results statement.
Vodafone had suffered a net loss of 1.98 billion in the same part of the previous fiscal year, when the group was rocked by impairment charges in indebted eurozone nations Spain and Italy.
On the downside in Frankfurt, the price of shares in Infineon fell by 4.28 percent to 6.977 euros.
The German chip maker was hit after predicting that sales would drop in all divisions in the first quarter of its new business year.
Wall Street had finished modestly higher on Monday as investors appeared to take a breather after Friday s strong rally on the back of encouraging jobs data.
The Dow Jones Industrial Average gained 0.14 percent at 15,783.10 points, striking a second consecutive record high.
However, trading volumes in the United States were thinner than usual because of the Veterans Day holiday.
Asian stock markets were mostly higher on Tuesday amid a lack of trading cues, as markets awaited the outcome of a major political meeting on economic reforms in China.
Tokyo stocks closed up 2.23 percent, Seoul rose 0.92 percent and Shanghai won 0.82 percent, while Hong Kong retreated 0.73 percent.
