European Stocks Rise for a Second Day as Fed Meets
LONDON (The Deal) -- European markets rose for a second day Wednesday as investors awaited the outcome of the U.S. Federal Reserve monetary-policy meeting and digested minutes released Wednesday from the June 4-5 Bank of England meeting.
In London, the FTSE 100 rose 0.40% to 6,793.62, while in Frankfurt the DAX added 0.21% to 9,940.96. In Paris, the CAC 40 gained 0.10% to 4,540.46.
Shares in Zoopla Property Group rose as much as 7.3% in their debut on the London Stock Exchange. Shares in the real estate Web sites operator, backed by Daily Mail & General Trust, were priced at 220 pence a share, for a starting market valuation of 918.8 million pounds ($1.6 billion).
In Madrid, shares in Telefonica gained 1.21% to 12.58 euros, after Spain's largest phone company announced an offer to buy Mediaset's 22% stake in Spanish pay-TV company Distribuidora de Television Digital for 295 million euros.Shares in Telefonica also got a boost from expectations that it will get the conditional nod from the European Commission for its 8.6 billion euros pursuit of Royal KPN's German E-Plus mobile unit. At a closed-door meeting in Brussels Wednesday, representatives of some EU member states including Germany, Ireland, Austria and the U.K. were expected to voice concerns over that deal, which would cut the number of German mobile operators from four to three. The EC has until July 7 to wrap up its in-depth investigation. Later Wednesday, all eyes will be on the U.S. Fed meeting where policy makers in the world's largest economy are expected to scale back economic stimulus and release a new set of quarterly forecasts. The Fed is also scheduled to release new quarterly forecasts for unemployment, inflation, economic growth and the benchmark federal funds rate, and announce a scaling back in economic stimulus. Economists surveyed by Bloomberg News predicted a reduction in monthly asset purchases by $10 billion to $35 billion at the meeting, and a halt in bond buying as of October. During Chair Janet Yellen's post-meeting press conference markets will be listening for any hints about longer-term plans on whether to raise interest rates as economic growth starts to pick up. On Tuesday, the U.S. Bureau of Labor Statistics reported a 0.4% rise in the consumer price index, the biggest monthly increase since February 2013. In the U.K. on Wednesday, minutes released from the Bank of England Monetary Committee meeting earlier in the month added to expectations of rate action in the country sooner than expected. In the report, policy makers said they were 'surprised' that markets had not priced in a higher chance of an interest-rate increase this year, following indications that growth would not slow in the second half. "In that context, the relatively low probability attached to a Bank Rate increase this year implied by some financial market prices was somewhat surprising," the BOE said in its report. The June meeting took place before Gov. Mark Carney said interest rates might start to rise earlier than expected. Asian markets were down, with the exception of Japan where the Nikkei rose 0.93% to 15,116. In Hong Kong, the Hang Seng fell 0.09% to 23,281.72. Nikon fell 2.6% in Tokyo after JPMorgan Chase downgraded its rating on the stock to "underweight" from "neutral."
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