LONDON (The Deal) -- Many European markets bounced back this morning, ignoring the geopolitical gloom and, for the moment, even the troubling economic climate. Germany seemed more interested in first-half results from its biggest utility E.ON (EONGY) than in the eurozone’s slowing inflation rate -- where some countries, including France and Spain, have been showing deflationary tendencies.
However, in London, the FTSE 100 lost ground in early trading, recovering slowly as mixed messages emerged on the economy. Unemployment fell to a six year low of 6.4% in June, but wages fell by 0.2%, the first quarterly decline since 2009.
So should the Bank of England consider raising interest rates this year or next? How much slack is there really in the British economy? That’s still the question which divides economists -- and the figures just aren’t giving the answers. Neither is Bank of England governor Mark Carney, who declined to answer questions on timing and repeated that when rates do rise, the pace will be gradual. His dovish remarks emboldened the market.
The FTSE100 was soon rising. By 11 a.m. it was up 0.2% at 6,646.
In Germany, the DAX was up 0.87% at 9,148.
E.ON soared nearly 4.7% to €13.78 on the news that its results would be in line within expectations, with falling sales and Ebitda reflecting certain asset disposals and exchange rate losses. It said it was doing as well as could be expected in difficult times, and pointed to rising numbers of domestic customers, as well as strong performances from its renewable energy and oil and gas production businesses.
In the U.K., car insurer Admiral (AMIGY) slumped over 4% to 1,391 pence, less on disappointing first-half figures than on the weaker outlook for car insurance margins for the year as a whole. But life insurer Prudential (PRU) - Get Report was still rising following yesterday’s good results and was up 1.94% at 1,395 pence, and budget airline EasyJet (EJTTF) soared as fuel prices continued to sink.
In Paris, the CAC 40 was up 0.58% at 4,186, while Moscow’s MICEX was up for the fourth straight day, rising 1.15% to 1,390. In Asia, Japan’s Nikkei 225 shrugged off an apparent economic slowdown to rise 0.35% to 15,213.63, while China’s Shanghai Composite closed up 0.06% at 2,222.88.