LONDON ( The Deal) -- European markets headed higher Wednesday, following rises in New York on Tuesday and in Asia overnight. But gains were pared sharply later.
In London, the market was set back by publication of the latest U.K. unemployment figures. They showed the jobless total had fallen unexpectedly to just 7.1%. The decline in numbers out of work has accelerated since last summer when the Bank of England hinted it would not consider raising interest rates until unemployment fell below 7% on the assumption that threshold wouldn't be crossed before 2016. But since then the central bank has tried to send a more careful message. In the minutes of the bank's January meeting, also published Wednesday, it shows the Monetary Policy Committee will take other considerations into account, including the recent fall in inflation, the U.K.'s poor productivity record and the continued headwinds to growth in the aftermath of the financial crisis. So no immediate move to raise interest rates -- and when the time comes, the rise will be gradual.
Some attention was focused on personnel issues. In Frankfurt, insurer Allianz fell back on the surprise news that respected investor and financial commentator Mohammed El-Erian has resigned as the head of its asset management subsidiary Pimco. In Stockholm, Mia Brunell Livfors's resignation as CEO of technology-focused investment manager Kinnevik knocked its share price.
London was down 0.03% at 6832.29. Paris was up at 0.9% at 4328. Frankfurt, which at one point Tuesday reached a record high of 9794, had dipped below Tuesday's close and was down 0.04% at 9726.04.
However, the sun seems to have been shining overnight in China, where the Shanghai Composite closed up 2.16% at 2051.75. The index had fallen below the psychologically important 2000 threshold on Tuesday, but markets were relieved by the news that the People's Bank of China has injected new liquidity into the system.
Shanghai's rise in turn helped Hong Kong's Hang Seng close up 0.2%, despite the news that Hong Kong Electric, a utility owned by Asia's richest man Li Ka-shing, has priced its Hong Kong IPO at the bottom of the range at HK$5.45 per unit, to raise a total of US $3.1 billion.
In Japan, the Nikkei 225 was up 0.16 at 15,820.96.