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Shares, euro inch down awaiting central bank moves

Published: July 4, 2012 | 8:09 am
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European shares edged back from two-month highs on Wednesday after three days of gains made on hopes of more monetary stimulus from central banks and progress made in dealing with the euro zone debt crisis.

Activity was expected to be subdued with U.S. markets closed for the Independence Day holiday, and meetings of European Central Bank and the Bank of England policy makers on Thursday.

The FTSE Eurofirst 300 index .FTEU3 of top European shares was down 0.1 percent at 1,044.90 points, having risen 1 percent on Tuesday to its highest closing level since early May.

The euro inched lower to $1.2593, well below Friday’s high of $1.2693 but above the previous day’s low of $1.256.

The prospect of further central bank monetary easing has also lifted prices of gold and other commodities this week, while increased tension over Iran has added to gains in oil with Brent crude hovering just above $100 a barrel.

Expectations of further accommodation from the ECB and an announcement of increased quantitative easing by the BoE on the same day “are all examples of market-friendly events, propping equities and favoring oil relative to gold”, said Ashraf Laidi, chief global strategist at City Index.

reuters

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