European markets get a boost from run of solid data

LONDON – European stock markets eked out some modest gains Tuesday after encouraging economic figures boosted hopes that the region’s recovery is gathering pace.

KEEPING SCORE: In Europe, France’s CAC 40 rose 0.3 per cent to 4,799 while Germany’s DAX advanced 0.1 per cent to 11,696. The FTSE 100 index of leading British shares was 0.6 per cent higher at 7,162. U.S. stocks were poised for modest losses at the open with Dow futures and the broader S&P 500 futures down 0.1 per cent.

EUROPE REVITALIZED: A series of economic releases provided clear signs of a recovery gathering steam in Europe. Quarterly growth edged up to 0.5 per cent while unemployment fell to an eight-year low of 9.6 per cent. And inflation spiked sharply higher to a four-year high of 1.8 per cent. Altogether, the data stoked some speculation that the European Central Bank will soon be in a position to move away from its extraordinary monetary policies from a position of relative strength.

ANALYST TAKE: “The European Central Bank’s large bond-buying program appears to be finally working its magic,” said Fawad Razaqzada, market analyst at Forex.com. “Inflation is on the rise, unemployment is falling and the economic bloc is growing, all thanks to years of zero interest rates, several versions of bond purchases program and a resulting weak currency.”

TRUMP FACTOR: The market fallout of Trump’s travel ban on seven Muslim-majority countries has faded. On Monday, investors were rattled, with energy companies and airlines hit in particular. Technology companies also sagged on worries that future administration moves will make it harder for them to hire skilled, foreign-born workers. Trump also suspended the U.S. refugee program for 120 days and stopped all entry by Syrians into the U.S.

JAPAN: Japan’s central bank left its lax monetary policy unchanged in its first board meeting of the year, but upgraded its growth estimates, citing signs of recovery in manufacturing. The most recent data, for December, paint a mixed picture, with stronger factory output but weaker retail sales and household spending. The Bank of Japan kept its 1-year-old minus 0.1 per cent benchmark interest rate intact.

ASIA’S DAY: Japan’s benchmark Nikkei 225 dipped 1.7 per cent to finish at 19,041.34 as a stronger yen helped send shares lower. Australia’s S&P/ASX 200 dropped 0.7 per cent to 5,620.90. South Korea’s Kospi lost 0.8 per cent to 2,067.57. Markets in Hong Kong, China and Taiwan were closed for Lunar New Year holidays.

ENERGY: U.S. crude oil fell 16 cents to $52.47 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the benchmark for international oil prices, rose 9 cents to $55.41 a barrel in London.

CURRENCIES: The euro rose 0.6 per cent to $1.0764 while the dollar fell 0.3 per cent to 113.32 yen.