• Caught in the debt trap?

    Help us help you by taking our second annual Debt survey and you could win R3 000.

  • Rich man, poor man

    Culture change from below is the only way to overcome poverty, says Leopold Scholtz.

  • Tech bubble talk

    After the tech euphoria of 2013, the fast-moving sector has hit a speed bump.

Data provided by McGregor BFA
All data is delayed
Loading...
See More

Shares firm on ECB hopes

Aug 21 2012 08:11 Reuters

Related Articles

Shares ease after recent gains

Shares rise as Merkel soothes nerves

Asian shares edge higher

Shares fall, pausing after US data

Shares, euro gain ahead of data

Shares inch down as growth worries weigh

 
Tokyo - Shares edged up on Tuesday as investors held on to hopes the European Central Bank will act to soothe borrowing costs, even as officials denied a report about the shape of its planned bond buying strategy.

MSCI's broadest index of Asia-Pacific shares outside Japan added 0.2% while Japan's Nikkei stock average opened down 0.1% after rising to a three-month high on Monday.

US stocks were flat on Monday, pausing after a six-week rise, but Apple hit a new high to become the world's most valuable public company while the Standard & Poor's 500 index hovered near a four-year peak. Europe's top shares fell.

"There was no movement in the New York markets. Today's market will be very cautious and uncertain," said Takashi Hiroki, chief strategist at Monex, of Japanese stocks.

The ECB said on Monday it was misleading to talk about decisions not yet taken, denying a weekend report which said the bank is considering buying the bonds of struggling eurozone countries when their yield spreads hit a certain level over German bonds.

The Bundesbank also kept its opposition to the ECB buying eurozone sovereign bonds, even after German Chancellor Angela Merkel voiced support for the ECB's crisis-fighting strategy last week.

"Strictly limited and highly conditional support by the ECB is unlikely to provide an early resolution of the financial stress that confronts 'peripheral' European sovereigns," Barclays Capital said in a research note.

"For now, however, investors seem to be adopting a hopeful rather than sceptical stance," it said.

Global stocks and the euro closed almost flat on Monday. Oil and US Treasury prices also hugged their break-even point, while Spanish sovereign bonds rallied and lowered their yields further from critically high levels.

"In a broader sense investors continue to respond favorably to coordinated global central bank intervention, part of which is the ability to successfully jawbone markets into the belief that whatever they have up their sleeves, central bankers will trump all," said Andrew Wilkinson, chief economic strategist at Miller Tabak & Co.

After a couple of weeks of summer lull, markets will brace for major events including the ECB's policy meeting on September 6 and a meeting of eurozone finance ministers in mid-September.

Leaders of Germany, France, the Eurogroup and Greece are meeting bilaterally this week, with German Chancellor Angela Merkel and Greek Prime Minister Antonis Samaras holding a dialogue on Friday over Greece's rescue plans ahead of a visit to Greece next month by global lenders to finalise their assessment of Athens' austerity reforms.

The dollar traded down 0.1% at ¥79.32, retreating from a five-week high against the yen at ¥79.660 hit on Monday. The euro inched up 0.1% to $1.2354.

Asian credit markets firmed, with the spread on the iTraxx Asia ex-Japan investment-grade index tightening by 2 basis points.

Oil was mixed, with Brent up 0.1% at $113.78 a barrel while US crude futures eased 0.1% to $95.91 a barrel.

As lacklustre stock market returns and historically low interest rates have made it difficult for pensions to earn a enough return, many of the largest US public pensions have raised their exposure to alternative investments to record levels this year, ranging from Polish energy facilities to catastrophe bonds. 


*Follow Fin24 on Twitter, Facebook and Google+.

ecb  |  markets  |  euro
NEXT ON FIN24X

 
 
 

Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
0 comments
Add your comment
Comment 0 characters remaining
 

Company Snapshot

We're Talking About: Small Business

Standard Bank is looking for 12 entrepreneurs to participate in a 10-part TV series. They could win a R1m investment into their dream.
 
 

The rich will pay - Mpofu

The EFF in Gauteng will focus all its energy on improving the lives of the poor, the party's premier candidate Dali Mpofu says.

 
 

Latest elections multimedia

Watch what happened when we blindfolded Helen Zille and asked her to eat random things
13 days to elections - news you need to know
11 Julius Malema quotes you'll never forget
DA won't get 30% - Zille

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...
Loading...