London: Europe’s main stock markets slipped on Tuesday after recent strong gains, with traders sitting tight as the Eurozone awaits fresh central bank stimulus.
London’s benchmark FTSE 100 index dipped 0.16 per cent to stand at 6,928 points in midday deals after reaching an intraday high on Monday.
Frankfurt’s DAX 30 index slid 0.04 per cent to 11,405 points and in Paris the CAC 40 shed 0.09 per cent to 4,913 points compared with Monday’s close.
The euro dropped to $1.1156 from $1.1182 late in New York on Monday.
“Equities have surged higher in recent weeks on hopes central banks’ record low interest rates, combined with the use of unconventional policy tools such as quantitative easing, will continue to drive yield-seeking investors into the stock markets and provide stimulus for economic growth,” said Fawad Razaqzada, technical analyst at FOREX.com trading group.
On Thursday, the European Central Bank will unveil the details of the bond purchase programme it is embarking on later this month.
Greece is also likely to be at the top of the agenda, following the recent Eurozone deal to extend aid to the debt-wracked country, analysts say.
The European Bank for Reconstruction and Development on Tuesday said it would begin funding critically needed investment in cash-strapped Greece as Athens nears the end of a massive bailout programme.
The EBRD said the programme would cover the next five years until 2020 but declined to give a figure for its potential investment after reports it could be as much as 1.0 billion euros.
“What we will be trying to do is to use the bank’s expertise to develop the private sector to promote growth,” EBRD president Suma Chakrabarti told a press conference in Brussels.
On the banking front in London, shares in Barclays shed 2.72 per cent to 255.60 pence after the embattled British bank said it had fallen into a net loss last year, hit by huge costs linked to its alleged role in the rigging of foreign exchange markets.
“The additional foreign exchange provision is unwelcome, whilst other regulatory discussions which may lead to further fines lurk in the background,” said Richard Hunter, head of equities at Hargreaves Lansdown Stockbrokers.
On the other hand, shares of Portuguese banks BPI and BCP soared on Tuesday over reports that businesswoman Isabel Dos Santos, daughter of the Angolan president, was studying a possible merger of the two banks, a source close to the matter told AFP.
Around midday in Lisbon shares of BPI surged 7.43 per cent while BCP climbed 4.92 per cent, with the PSI Index up an overal 0.75 per cent.
Also in the upside in London, British American Tobacco shares rose 0.52 per cent to 3,776 pence after it outlined plans to take control of its Brazilian unit Souza Cruz.
BAT said in a statement that it will seek to buy up to 24.7 per cent of Souza Cruz shares which it does not already own, for about $3.5 billion (3.15 billion euros).
Asian equities were mostly lower Tuesday after healthy gains in the previous session attracted profit-takers, offsetting a strong lead from Wall Street.
US shares added to their six-year bull run Monday, with the Dow and S&P500 again ending at record highs, while the Nasdaq surged above 5,000 for the first time since 2000, when the dot-com bubble burst.
