European stock markets traded in narrow ranges Thursday as the momentum stemming from Wall Street’s barnstorming run faded. However, the dollar remained in the ascendant as investors priced in a growing likelihood of another U.S. rate hike this month.
KEEPING SCORE: In Europe, Germany’s DAX was steady at 12,072 while the CAC 40 in France was up 0.2 percent at 4,970. Britain’s FTSE 100 was 0.1 percent higher at 7,377. U.S. stocks were poised for modest declines at the open with Dow futures and the broader S&P 500 futures down 0.1 percent.
WALL STREET HIGHS: The Dow Jones industrial average surpassed 21,000 points for the first time on Wednesday in what was the biggest gain for the blue chip index so far this year. Optimism over corporate tax cuts, deregulation and other business-friendly policy proposals reiterated by President Donald Trump during a speech before Congress helped fuel the rally. The Dow jumped 1.5 percent to 21,115.55. The S&P 500 index gained 1.4 percent, to 2,395.96 in its biggest single-day gain. The Nasdaq composite index also added 1.4 percent, to 5,904.03.
FED IN FOCUS: Many market participants say the market outlook, particularly on Wall Street, will hinge on upcoming U.S. economic data and their impact on expectations over when the Federal Reserve will next raise interest rates. A number of officials are set to speak over the coming couple of days before they go into so-called purdah mode ahead of their next policy meeting in the middle of March.
ANALYST TAKE: “A day after their biggest daily gains of the year so far, U.S. equity indices are heading for an unchanged open on Thursday as investors await more commentary from the Fed ahead of its blackout period,” said Craig Erlam, senior market analyst at OANDA. “With rate hike expectations now above 70 percent for March, the job of the remaining officials should be straightforward if keeping March on the table is in fact their aim.”
CURRENCIES: Mounting speculation that the Fed will raise interest rates again later this month has helped push the dollar higher. The euro was down 0.3 percent at $1.0515 while the dollar rose 0.6 percent to 114.38 yen.
ENERGY: U.S. crude fell 84 cents to $52.99 a barrel in electronic trading on the New York Mercantile Exchange while Brent crude, used to price international oils, was down 79 cents to $55.57 a barrel.
ASIA’S DAY: Tokyo’s Nikkei 225 stock index advanced 0.9 percent to 19,564.80 and the Hang Seng index in Hong Kong added 0.5 percent to 23,728.07. The Kospi in South Korea climbed 0.7 percent to 2,102.65 and Australia’s S&P ASX/200 jumped 1.3 percent to 5,776.60. India’s Sensex lost 0.3 percent to 28,898.81. The Shanghai Composite Index slipped 0.5 percent to 3,230.03.
