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Dec 19, 2014 8:28 AM

In spite of Asia advance, European stocks steady

The Associated Press

LONDON (AP) European markets were largely subdued Friday, a day after a big rally in the wake of the U.S. Federal Reserve's reassurance it was in no hurry to hike interest rates. But shares of Sony Corp. dropped as a hacking scandal rocked its American movies unit.

KEEPING SCORE: In Europe, Germany's DAX was down 0.6 percent 9,758 while the CAC-40 in France fell 0.5 percent to 4,228. The FTSE 100 index was 0.5 percent higher at 6,497. Wall Street was poised for a solid opening with Dow futures and the broader S&P 500 futures up 0.3 percent.

RISK TURNAROUND: At the start of the week, investors were concerned by falling oil prices and what they said about the state of the world economy. The ensuing collapse in the value of the ruble also added to the cautious tone. However, since Wednesday, market optimism has recovered. The catalyst was Fed Chair Janet Yellen saying that she foresaw no rate hike in the first quarter of 2015 and that the central bank would be "patient" in deciding when to do so. The comments eased concerns that policymakers would start raising interest rates at a time when growth outside the U.S. appears to be flagging.

THE QUOTE: "The major equity markets are finishing the trading year on a positive note thanks to Janet Yellen's Christmas message," said Neil MacKinnon, global macros strategist at VTB Capital. "There is nothing substantive on the economic data agenda and the markets will quickly switch into holiday mode."

ASIA'S DAY: Asian markets pushed on in the wake of the big gains posted in Europe and the U.S. on Thursday. Japan's Nikkei 225 jumped 2.4 percent to 17,621.40 while South Korea's Kospi added 1.7 percent 1,929.98. Hong Kong's Hang Seng advanced 1.3 percent to 23,116.63 while Australia's S&P/ASX 200 vaulted 2.5 percent to 5,338.60.

SONY TROUBLE: Sony was one notable stock suffering in Asia. Its shares closed 1.3 percent lower in Tokyo amid the fallout from last month's hack of computer systems at Sony Pictures Entertainment. The studio's reputation is in tatters as embarrassing revelations spill from tens of thousands of leaked emails that could damage its relationships with stars and give other studios an advantage. American investigators have linked North Korea to the hack of the Hollywood company and Sony Pictures cancelled the release of "The Interview," a movie that spoofs an assassination of North Korean leader Kim Jong Un.

ENERGY: Benchmark U.S. crude was up 71 cents at $54.92 a barrel in electronic trading on the New York Mercantile Exchange. Oil has plunged since June, when it peaked at $107 a barrel. Overproduction and weak demand are behind the fall in global oil.

CURRENCIES: The mood was fairly subdued in foreign exchange markets, with the euro flat at $1.2283 and the dollar up 0.2 percent at 119.17 yen.


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