European Stocks Are Drifting, But U.S. Markets Have One Direction In Mind
Frankfurt (Oct 10) European stocks drifted modestly lower Tuesday as sentiment from negative session on Wall Street drifts into regional markets and investors keep a keen eye on developments in Catalonia as its President prepares to address parliament on independence.
The Stoxx Europe 600 index, the region's broadest measure of share prices, was little-changed from its Monday close at 390.15 points in the opening 90 minutes of trading while benchmarks in Germany and France were seen 0.4% and 0.25% lower respectively. Britain's FTSE 100 was trading marginally to the downside as the pound gained 0.37% to 1.3189 against the U.S. dollar after a much stronger-than-expected reading for U.K. manufacturing output over the month of August.
Early indications from U.S. equity futures suggest a modest rebound for Wall Street at the opening bell after last night's dips into the red, with Dow mini futures pointing to a 22-point, or 0.1% advance and S&P mini futures indicating a smaller 0.04% gain.
In Europe, Spain's IBEX index was marked 0.52% lower in Madrid, and is now around 1.5% south levels prior to the Oct. 1 referendum in Catalonia, as President Carles Puigdemont prepares to hold a debate in parliament on independence from Madrid despite the session having been suspended by Spain's Constitutional Court.
A further development could gain pace today, as well, after reports that Catalan lawmakers could form an ad-hoc alliance with Socialist in parliament in Madrid which, if joined by lawmakers from the Basque region, could potentially topple the coalition government of Prime Minister Mariano Rajoy and trigger fresh national elections.
Overnight in Asia, the return of markets in Japan and South Korea after a three-day weekend boosted benchmarks in Tokyo and Seoul, which both shrugged of the dollar weakness and last night's losses on Wall Street.
The Nikkei 225 ended the session 0.64% higher at 20,823.51 points while the broader TOPIX index gained 0.47% to close at 1,695.14 points - the highest level since July 2007. In Seoul, the KOSPI Composite Index in South Korea rallied nearly 1.75%, paced by solid gains for Samsung Electronics, which rose 3.63% to 2.657 million Korean won.
One of the notable movers from the Asia session was Kobe Steel Ltd (KBSTY) , which plunged more 20% Tuesday after the group revealed it had falsified data on the strength and durability of copper and aluminium shipments to customers for as much as a decade.
The scandal, which is the latest in a series of corporate misdeeds from within the world's second-largest economy, could have implications for automakers and aerospace firms and could lead to recalls for the country's car industry after the Transport Ministry called for deeper safety checks in the wake of the revelations.
Kobe Steel shares fell nearly 22% in Tokyo Tuesday, the first day of trading since the company published details of the scandal, to close at ¥1,068.00 each, the lowest since June 23.
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