07:00 GMT. EUROPEAN OPENING SNAPSHOT. European bourses were called to start Thursday’s session little changed with momentum neutralised by a solid close on Wall Street but another weak performance out of Asia.
Further containing any possible bullish undertones will be the continued concerns about contagion from the sovereign debt woes of Greece and Dubai as the latter’s stockmarket lost another 4.6 per cent in early trade.
Spreadbetters said the FTSE 100 may open 1 point higher at 5,205.
Most Asian stockmarkets began in reasonable fettle, taking their lead from New York’s ability to come off its lows and close at session highs, up 0.4 per cent on the S&P 500 to 1,095.9. Even the Vix index, a measure of expected market volatility, had dropped 4.4 per cent to 22.66.
But Asian stocks later withered. And the most pallid was Tokyo, where, yet again, the strength of the yen overnight hit exporters. The Nikkei 225 fell for the third consecutive day, off 1.4 per cent to 9,862.8, despite a report on machinery orders not being as bad as forecast.
The Hang Seng in Hong Kong lost 0.7 per cent to 21,599.4 and the Shanghai Composite on the mainland gave up a chunk of its early advance to add 0.2 per cent at 3,246.6. Property stocks and financial groups were under pressure as investors worried about the authorities taking measures to damp speculation and from capital raising fears respectively.
One bright spark was South Korea, where the Kospi added 1.1 per cent to 1,652.7 after the central bank kept interest rates at 2 per cent. However, the yield on the South Korean 10-year government bond jumped 14 basis points as the BoK governor suggested rates would rise early next year.
In Australia, the S&P /ASX 200 dropped 0.7 per cent to 4,606.7 with retailers under pressure as better than expected jobs data raised fears of further interest rate hikes. This also gave a boost to the Aussie dollar, which rose 0.5 per cent to $0.9152.
There was little action elsewhere in the forex market, however. The dollar remained near its closing levels overnight to trade up 0.1 per cent versus the euro at $1.4713 and up 0.1 per cent on a trade-weighted basis at 76.07.
The yen consolidated the previous session’s advance, rising 0.1 per cent to Y87.82 against the dollar and adding 0.2 per cent to Y129.18 versus the euro.
The meagre moves for the dollar provided little incentive for commodity traders to get involved. Oil was up just 0.1 per cent to $70.76 following Wednesday’s sharp fall.
Gold was stable at $1,129.50, nearly $100 below its peak reached last week.
The benchmark US 10-year Treasury yield fell 2 basis points to 3.42 per cent. The US Treasury will auction $13bn in 30-year notes today.
DATA WATCH.
The Bank of England will release its decision on monetary policy. The main interest rate is forecast to remain at 0.5 per cent, but traders will be watching for any mention of changes to the Bank’s quantitative easing policy.
Later, the US will publish the initial jobless claim report. Forecasts are for 460,000 new dole claimants last week, 3,000 higher than the week before.
