Dec 4, 2014 3:53 AM
Europe stocks steady ahead of ECB, China surges
The Associated Press
TOKYO (AP) European stocks were little changed Thursday ahead of an ECB policy meeting while Asian markets rose, led by Shanghai and Tokyo, as investors bet on more stimulus in China and a victory for Japan's pro-business ruling party in elections this month.
KEEPING SCORE: France's CAC 40 was steady at 4,393.24 while Germany's DAX added 0.2 percent to 9,994.50. Britain's FTSE 100 rose 0.1 percent to 6,722.27. Futures pointed to flat trading on Wall Street. Dow and S&P 500 futures were both little changed after U.S. stock indexes posted new highs Wednesday.
ECB MEETING: European Central Bank president Mario Draghi is expected to speak forcefully Thursday about the bank's willingness to launch more stimulus to support the struggling economy. Strong action, however, will likely wait until the first months of next year. More stimulus could include large-scale purchases of government bonds, a step which involves pushing newly created money into the economy to raise growth and inflation. It's a tool the U.S. Federal Reserve, Bank of England and Bank of Japan have all used.
THE QUOTE: "Comments from ECB members Draghi, Coeure and Constancio have raised expectations of late, but there is at best a 5 percent chance we get a full blown government bond buying program announced today. What could be announced is that the ECB intend to buy corporate bonds," said Chris Weston, chief market strategist at IG in Melbourne, Australia.
ASIA'S DAY: China's Shanghai Composite surged 4.3 percent to 2,899.46 ahead of an annual economic planning meeting next week that comes amid hopes Beijing will announce more stimulus as growth continues to wane. The Nikkei, the benchmark for the Tokyo Stock Exchange, jumped 0.9 percent to finish at 17,887.21, reaching a high not seen in more than seven years. South Korea's Kospi gained 0.9 percent to 1,986.61. Hong Kong's Hang Seng added 1.7 percent to 23,832.56. Shares were also higher in Singapore, Australia, Taiwan, India and Indonesia.
JAPAN VOTE: Public opinion polls point to a victory for the ruling party of Prime Minister Shinzo Abe in nationwide elections set for later this month. That's another factor boosting Japan's stock prices because the "Abenomics" policy of easy money to overcome deflation and engineer a weak yen has been a plus for corporate profits.
ENERGY: Benchmark U.S. crude was up 50 cents at $67.88 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude rose 17 cents to $70.08 a barrel on the ICE exchange in London.
CURRENCIES: The euro was little changed at $1.2321 from $1.2315 late Wednesday. The dollar was trading at seven-year highs against the yen, inching up to 119.90 yen from 119.84 yen