Stocks drop ahead of BoE's policy decision

Thursday, 12. May 2016 10:28

Indices of main capital markets in Europe fell up to 1% in early trade on Thursday with a slump in the financial sector accounting for a large share of the losses, while gold sprung back down after two days of solid gains. Traders were waiting for today's statement of the Bank of England's monetary policy panel to give more clarity on the possible consequences of the referendum on Britain's status relative to the European Union, but also comments on the domestic housing market and global factors influencing the country's economy. The Royal Institution of Chartered Surveyors today said demand for homes slowed last month, as a stamp duty of 3% was introduced for buyers of second homes and rental properties.

The FTSE 100 surrendered 0.58% from yesterday's closing level at 10:08 a.m. CET. Centrica, Admiral and Sainsbury were all down over 3.3%, while the drop in the main indicator was partly offset by Mondi's rise by 3%. Gold miners Randgold and Fresnillo jumped 1.72% and 1.58%, respectively, despite today's devaluation of market value of the yellow metal by 0.4%. 

The DAX was 0.73% lower at 9:58 a.m. CET, with the biggest slump registered in shares of the Deutsche Börse, 2.8%, while Allianz slid 1.2%. RWE surged 5.68% after stating operating profit in first quarter rose 7% and ebitda advanced 5% compared to the same period of last year. Still, adjusted net income dropped 2%. E.ON, another giant utility, was second by performance, adding 1.63%.

The CAC shed 0.39% at 9:58 a.m. CET. Official statistics showed core inflation and overall consumer prices advanced only 0.1% in April on an annual basis. Crédit Agricole sunk 4.85% with a report of a disappointing slump in quarterly profit, by 71% on the year, from unexpectedly small earnings. The bank cited market volatility as causing caution in clients' activities, and announced restructuring and sale of substantial assets. LafargeHolcim traded 3.6% in the red following a statement sales in the quarter through March slumped 5.5% on a lower ebitda than in the same period of 2015.

Swiss SMI lost 0.8% at 9:58 a.m. CET. UBS fell the most, 5.55%, while LafargeHolcim was right behind with 3.15% in the red. Zurich Insurance rose 3.88%, leading the gainers. The company reported it booked a 28% lower quarterly profit than for the first three months of last year, but the figure marks a significant improvement from a net gap of $424 million from the prior quarter. 

Sterling inched 0.1% lower against the dollar at 10:27 a.m. CET, easing an earlier moderate decline, and lost 0.14% compared to the franc. The greenback's index rose 0.16% with an appreciation of 0.15% versus the euro.


Image: EPA / Boris Rössler

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