Forexpros – European stocks edged higher on Thursday, as investors eyed the release of a highly anticipated policy statement by the European Central Bank later in the day, after the Federal Reserve held back from announcing any immediate easing measures on Wednesday.
During European morning trade, the EURO STOXX 50 added 0.09%, France’s CAC 40 rose 0.16%, while Germany’s DAX 30 inched up 0.01%.
Expectations that the ECB may resume its bond buying program, to help lower Spanish and Italian borrowing costs, have been building since central bank President Mario Draghi pledged last week to do whatever it takes to preserve the euro.
Investors remained cautious however, amid concerns that an inadequate policy response by the ECB could send markets lower.
Elsewhere, the U.S. central bank stopped short of launching a third round of quantitative easing, at its policy-setting meeting on Wednesday.
The Fed did indicate, however, that it will “closely monitor” the economy and “will provide additional accommodation as needed to promote a stronger economic recovery and sustained improvement in labor market conditions.”
Financial stocks were broadly higher, as shares in France’s BNP Paribas and Societe Generale advanced 1.95% and 0.44%, while German lenders Deutsche Bank and Commerzbank added 0.08% and 0.24% respectively.
Earlier in the day, BNP Paribas posted a 13% drop in second-quarter profit, still less than expected, as the euro zone’s debt crisis curbed trading revenue.
Meanwhile, courier company Deutsche Post surged 3.17% after it posted earnings of EUR543 million, above estimates.
On the downside, France-based Veolia tumbled 5.80% after saying it intends to cut investments by EUR500 million euros this fiscal year, in order to confirm full-year forecasts. The company also posted a first-half net income of EUR153 million, compared with a loss of EUR67 million a year earlier.
In London, FTSE 100 rose 0.27%, as investors eyed the release of key U.K. construction data later in the day.
Medical devices specialist Smith & Nephew led gains, with shares rallying 2.62% amid reports the company ramped up its dividend as it embarks on a progressive dividend policy on the back of the success of its recent restructuring.
Oil and gas giant BP also contributed to gains, climbing 1.17%, although the group reported a sharp drop in second quarter profits, from USD5.4 billion to USD238 million, due to impairment charges and the decision not to proceed with a flagship drilling project off Alaska.
Elsewhere, U.K. lenders were mixed, as shares in HSBC Holdings climbed 0.65% and Barclays advanced 0.64%, while the Royal Bank of Scotland rose 0.51% and Lloyds Banking plummeted 1.07% amid reports it had committed GBP5 billion towards helping first-time buyers onto the housing ladder by the end of the year.
In the U.S., equity markets pointed to a moderately higher open. The Dow Jones Industrial Average futures pointed to a 0.20% increase, S&P 500 futures signaled a 0.16% rise, while the Nasdaq 100 futures indicated a 0.16% gain.
Also Thursday, government data showed that the number of unemployed people in Spain declined by 27,800 in July after dropping by 98,900 the previous month.
Later in the day, the U.S. was to release government data on initial jobless claims and factory orders.
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