The Deal: European Stocks Up Amid Hope for End to U.S. Budget Impasse
LONDON (The Deal) -- A faint glimmer of light overnight on Washington's budget impasse gave a fillip to European markets on Thursday. London's FTSE 100, the Dax in Frankfurt and the CAC 40 in Paris all rose in morning trading. Paris was up by almost 1.3%, despite disappointing industrial and manufacturing output figures for August, which suggested that the French economic recovery is still sluggish.
The FTSE was up 0.81% at 6,388.96 by mid-morning.
In London, utility shares helped pull the market higher, as Scottish & Southern Energy, one of the so-called big six energy suppliers, said it expected to raise prices by an inflation busting 8.2% next month. The other five will likely follow suit soon. That will hurt consumers, but it revives confidence in the sector, after opposition leader Ed Miliband promised to freeze energy prices if he's elected in 2015.
Scottish & Southern shares were up 1.5% at 1,476 pence in early trading, while rival Centrica was up 1.8% at 367 pence.Japan's Nikkei was also up, once again mainly on the strength of the dollar, which generally gives a boost to the country's export stocks. But in Hong Kong, the Hang Seng closed down 0.4%. that was partly because cosmetics firm Sa Sa International said sales during China's recent week-long holiday were weaker than predicted. And just to show that concern over a U.S. default hasn't gone away completely, the Hong Kong exchange's clearing house said it was planning to treble the haircut applied to holdings of some U.S. Treasury bills used as collateral on futures trades. The haircut applied by Hong Kong Exchanges and Clearing on bills with maturities of less than a year will rise to 3%.
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