London Shares Buck Global Rally

London shares buck global rally

LONDON, (UrduPoint / Pakistan Point News -6th Sept,2016) - Global stock markets rose Tuesday except in London which was weighed down by a rallying pound as fears about the economic impact of Britain's EU exit begin to ease.

US shares opened higher as traders returned to their desks after Monday's public holiday, and Frankfurt and Paris indices also gained after eurozone growth data. London's benchmark FTSE 100 index lost 0.4 percent as the pound advanced to $1.3363, building on Monday's gains won thanks to easing concerns over Brexit's economic fallout.

Official eurozone data showed the single Currency's bloc expanded by 0.3 percent in the second quarter, which marked a slowdown from the first three months of the year. Traders were meanwhile beginning to look ahead to the European Central Bank's monetary policy update due Thursday.

The ECB, comforted by better-than-expected data since Britain's vote in June to exit the European Union, is likely to keep drastic monetary policy changes in reserve, analysts predicted. Policymakers stress that many measures announced by the ECB in March -- when it lowered interest rates and extended stimulus measures -- have yet to take full effect.

"Now that the summer trading period is behind us following yesterday's Labor Day vacation in the US, the focus of financial market participants will be very much on the upcoming monetary policy events," said Derek Halpenny, European head of markets research at the Bank of Tokyo-Mitsubishi UFJ in London.

- M&A hogs US equity news - ================================ US stocks were lifted by merger announcements, including Canadian pipeline company Enbridge's acquisition of Spectra Energy in an all-stock deal valued at $28 billion.

Shares in US pharmaceutical company Monsanto rose 0.2 percent on news German pharmaceutical group Bayer raised its bid for the US company to almost $66 billion. General Electric slipped 0.6 percent after announcing $1.4 billion in 3D printing acquisitions.

Asian stock markets extended gains on diminishing prospects of a US interest rate rise this month, traders said. Data last week showed a healthy increase in US jobs creation -- indicating an improving economy -- but not a strong enough figure to justify an early increase in borrowing costs.

Bank of Japan chief Haruhiko Kuroda has meanwhile pledged fresh stimulus if necessary and has deflected talk of scaling back on its massive easing policy. After last week's jobs and manufacturing data, traders were awaiting figures on the US services sector.

"The global monetary landscape remains in focus following Friday's softer-than-expected US employment report and as the European Central Bank is set to deliver its monetary policy decision this week," said analysts at Charles Schwab in an investors' note.