European shares volatile ahead of EU finance ministers meeting
European shares are rather volatile with the beginning of this week`s session, with the lack of major fundamentals to be released.
The fluctuation in Europe`s stock markets also coincide Greek legislators` approval to the 2013 budget.
Investors, on the other end, are anxious to EU finance ministers` impending meeting in Brussels over a rescue plan to debt-laden Greece. However, it seems that the ministers would find difficulty in release the second aid tranche. Officials stated Thursday that the ministers will not come out with a concrete decision on Athens until the end of November as they anticipate Troika`s unfinished report.
Greece`s parliament endorsed earlier Monday the 2013 budget, which includes spending reductions recommended by the European Union and the International Monetary Fund. Only following EU recommendations would guarantee Athens the second rescue aid batch by international lenders.
At precisely 03:34 EST, French CAC 40 fell 0.12% to 3419.45, German DAX fell to 7619.09, or 0.08%, and Britain`s FTSE 100 by 0.16% to 0.16% to 5778.99.
Meanwhile, at 12:05 (GMT +3) the euro dropped to $1.2707 after opening at $1.2710. The EUR/USD pair hit highest intraday at $1.2737 and touched the low of $1.2696 so far.
The British pound continued falling pushing the GBP/USD pair lower to trade at $1.5883 after opening at $1.5901, recording the highest at $1.5913 and snapping back to intraday low of $1.5878.
Asian stocks seen lower on Japan’s contraction and the US fiscal woes
After data showed Japan’s economy shrank last quarter while worries over the U.S. fiscal woes persist, the MSCI Asia Pacific Index fell 0.3% at 14:35 in Tokyo, overshadowing the improved economic data from China.
Japan’s gross domestic product fell 3.5% from July to September, after a revised 0.3% gain the previous quarter. The world’s third largest economy shrank as overseas sales dropped and consumer spending slumped.
Meanwhile, worries over a possible U.S. recession advanced, as U.S. President Barak Obama is struggling to reach a deal to avert the looming “fiscal cliff”, a $600 billion of budget cuts and tax increases scheduled to take effect in January.
On the other hand, in China, exports increased at the fastest pace in five months in October by 11.6% compared with the 10% estimations. However, this suggests a less urgent need for new economic stimulus measures as recovery is improving.
Caution is also seen rising as Greece approved an austerity budget to allow it extend its international financial bailout and avoid bankruptcy; yet a meeting of the euro zone finance ministers today is not expected to take a final decision on that.
In Japan Nikkei 225 fell 0.93% to 8676.44 and Topix fell 1.12% to 722.58 on concerns over Japan’s contraction, the U.S. fiscal woes, Greece`s bailout and profit warnings from corporates.
Hong Kong’s Hang Seng rose 0.21% to 21430.30 and CSI 300 rose 0.49% to 2251.85 after China witnessed the biggest trade surplus in 45 months in October as exports rose by the highest in five months.
Australia’s S&P/ASX 200 fell 0.31% to 4448.03. Zealand’s NZX 50 rose 0.66% to 3983.99. South Korea’s Kospi fell 0.19% to 1900.87. Taiwan Taiex fell 0.35% to 7267.75. India’s BSE Sensex 30 fell 0.22% to 18642.61.
Singapore’s FTSE Strait Times fell 0.09% to 3006.89. Thailand’s Thai index rose 0.33% to 1295.06. Jakarta Comp fell 0.18% to 4325.73. FTSE Malaysia fell 0.23% to 1637.36. Philippine’s PSEi rose 0.03% to 5470.70.
Gold trades above three-week high, ahead of Eurogroup meeting
RBA lowers 2013 growth estimates
Reserve Bank of Australia reduced its 2013 growth estimates for the nation’s economy as investment in iron-ore, coal and natural gas slumped, while at the same time the Australian government pledged to return the budget surplus during the upcoming election year.
RBA lowered Australia`s growth estimates to a range of 2.25% to 3.25% in 2013, compared with August estimates of 2.75% to 3.25%. Consumer Price index is expected to climb 2% to 3% during the year ending December 2013.
Prime Minister Julia Gillard stood by forecasts for the budget to return to A$44 billion ($46 billion) surplus during the second half of the year, adding that RBA cut the nation’s overnight cash rate target by 1.5% since 2011 in order to support the nation’s construction and mining sectors.
At the same time, it’s expected that Australia`s central bank will cut interest rate during the upcoming period as global economic improvement is absent presently.