1800 A drop in oil prices triggered by a joint US and UK move to release strategic reserves pulled energy stocks and the wider FTSE 100 Index into the red.
Britain and America have reportedly agreed to cooperate to dampen high oil prices in a bid to prevent higher costs from hitting economic growth, causing the price of Brent crude in London to dip nearly 1 per cent to 123.4 US dollars a barrel.
The price drop in turn hit the FTSE’s heavyweight energy stocks, with BP, BG Group and Cairn Energy all falling, pulling the blue chip index down 4.7 points to 5,940.72.
The FTSE’s fall came despite upbeat jobs figures in the US, which revealed unemployment benefit claims hit a four-year low in February.
1400 French police have fired tear gas at steelworkers trying to force their way toward the headquarters of President Nicolas Sarkozy’s re-election campaign.
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Roughly 200 workers from an ArcelorMittal plant in Florange in northeast France travelled to Paris today in buses as part of a protest movement started last month to try to save jobs at the plant and in the industry.
After disembarking, they tried to walk toward Mr Sarkozy’s campaign office, and were met by riot police and gendarmes who tried to push the protesters back with shields.
After several minutes of fighting, the police fired tear gas to break up the crowd.
1300 A US billionaire’s proposal to build a European Las Vegas in Spain has cash-starved politicians salivating over potential revenue and jobs.
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Sheldon Adelson, chairman of Las Vegas Sands Corp, is courting Spain’s two top urban areas, Barcelona and Madrid, with plans for a 12-hotel, six-casino complex that could create a quarter of a million jobs.
Las Vegas Sands, which owns large gambling and entertainment resorts in Singapore and Macau, has a track record that makes the project seem more viable than similar schemes that have never materialised.
1230 European markets are fairly steady this lunchtime with London’s FTSE 100 index down 0.2 per cent, or 12 points, at 5,933, the German Dax is up 0.3 per cent and the CAC-40 in France remains flat.
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1200 Sticking with bonds. German ten-year government debt yields struggled to break above 2 per cent today, slowing a bond sell-off that has been fuelled by improved sentiment towards the global economic outlook.
1130 France saw its borrowing costs drop as it raised €10 billion (£8.4 billion) through a variety of medium and long-term bond auctions.
Yields went down on most of the bonds issued in today’s auction with the biggest sale being of €3.3 billion in five-year bonds.
France has a big deficit and concerns grew earlier this year that its borrowing costs could rise dangerously after Standard & Poor’s ratings agency stripped it of its cherished AAA rating.
1030 The number of people in work in the eurozone fell again in the last three months of 2011 while hourly labour costs rose, highlighting Europe’s difficulty in driving a recovery in jobs like that seen in the US.
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Employment in the 17 nations sharing the single currency fell 0.2 per cent in the fourth quarter compared to the third, according to Eurostat, the European Union’s statistics office.
The size of the working population shrank by the same margin in the third quarter from the second, as the economic impact of the area’s sovereign debt crisis bites.
1000 A second council member at the European Central Bank has underpinned earlier comments that the ECB is not planning further measures to help battered economies as it has played its part in the battle for eurozone stability.
Ewald Nowotny once again passed the baton to government leaders in a television interview with Reuters: “Just now we have to see how the various measures affect the economy,” he said.
Mr Nowotny added that it may take some time before the impact of the central bank’s actions become apparent, but “in the meantime, I do not see any need for further action.”
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0945 A permanent fix to the eurozone debt crisis requires a timely exit from temporary monetary measures, so says Erkki Liikanen, ECB Governing Council member.
Mr Liikanen’s comments today put the onus on governments to restore market confidence despite European Union leaders having pledged to do everything possible to protect the single currency.
“Central bank measures can be used to calm the financial markets, but a permanent solution to the debt crisis will require both successful fiscal and structural policies and a controlled and timely exit from the temporary central bank measures,” Liikanen, who also heads the Bank of Finland, said in a quarterly report.
Mr Liikanen said that the ECB’s twin refinancing operations, injecting €1 trillion into the region’s banks, have had a “decisive impact” and posed no threat to price stability.
He also forecast euro-area inflation to continue to be above 2 per cent this year. “Over the policy-relevant medium term, inflation risks remain balanced and inflation expectations firmly anchored,” he said.
0920 Ian King, Business Editor, writes: The Swiss National Bank has done it and so has the Bank of Japan. Now Norges Bank, Norway’s central bank, has become the latest central bank to take on the markets and seek to cut the value of its runaway currency.
The unexpected cut in its key policy rate yesterday, from 1.75 per cent to 1.5 per cent, sent the krone — which last month hit a nine-year high against the euro — to its lowest level for a month.
But the gambit is riskier than those of the SNB and BoJ. The krone, unlike the yen or Swiss franc, is underpinned by a strong oil price, so a rate cut may have less impact. Meanwhile, with fears growing in Norway of a house-price bubble, the bank may have to reverse this cut before long. It will be an interesting test of strength.
0900 Britain has received its second formal warning that it could lose its triple-A rating because of the Government’s high levels of debt.
Fitch credit ratings agency said it was putting Britain on “negative outlook” until at least 2014 as it argued a renewed crisis in the eurozone or lower than predicted growth could undermine the AAA rating.
The decision is embarrassing for the Government, coming the week before the Budget and the day after George Osborne suggested Britain’s finances were so stable that the Government could issue 100-year bonds.
0845 European markets are ambivalent this morning after a unanimous vote by the Greek cabinet to approve the terms of its international bailout yesterday.
London’s FTSE 100 share index is steady, dipping just 2 points at 5,941, Frankfurt’s Dax has lifted up 0.4 per cent and Paris has lifted a mere 0.1 per cent.
0645 Tokyo stocks bucked the region’s trend, rising 0.72 per cent, extending a rally from the previous session as a weakening yen provided support for Japan’s hard-hit exporters.
The Nikkei 225 index at the Tokyo Stock Exchange rose 72.76 points to close at 10,123.28 a day after breaking the 10,000 mark for the first time since July.
The Topix index of all first-section shares added 0.76 per cent, or 6.50 points, to 863.61.
0530 Asian stock markets were mixed throughout the day hindered by falling commodity prices and worries about the extent of China’s economic slowdown.
Benchmark oil remained below $106 per barrel while the dollar rose against the yen but slipped against the euro.
Japan’s Nikkei 225 index rose for a third straight day, basking in the ongoing retreat of the yen from record highs against the US dollar. The Nikkei was 0.9 per cent higher to 10,144.48.
But Hong Kong and mainland Chinese shares fell, a day after Chinese Premier Wen Jiabao said curbs that have started to cool surging housing prices will remain in place despite complaints they might worsen an economic slowdown. Construction and real estate sales are key drivers of China’s growth.
South Korea’s Kospi rose less than 0.1 per cent to 2,046.28, while Australia’s S&P/ASX 200 was down 0.3 per cent at 4,276.30.
Australian mining and resource-related shares that depend on Chinese demand were hurt by Wen’s comments. BHP Billiton, the world’s largest mining company, fell 1.7 per cent. OZ Minerals Ltd. dropped 2.6 per cent.
0415 Hong Kong shares fell 0.11 per cent in the morning session as traders took a breather from recent gains.
The benchmark Hang Seng Index shed 23.53 points to 21,284.36 on turnover of HK$34.45 billion ($4.40 billion).
0350 Tokyo stocks rose 0.40 per cent in the morning session, extending a rally from the previous session as a weakening yen provided support for Japan’s hard-hit exporters.
The Nikkei 225 index at the Tokyo Stock Exchange rose 40.67 points to 10,091.19 by noon, after breaking the 10,000 mark for the first time since July.
The Topix index of all first-section shares added 0.33 per cent, or 2.79 points, to 859.90.
A string of upbeat US economic data and Greece’s success in a debt swap with private investors buoyed spirits, dealers said.
“The trend of improvement is seen in the US economy, while expectations are growing for a V-shaped recovery for Japanese firms’ earnings on the back of the yen’s weakening,” Hiroichi Nishi, general manager of equity division at SMBC Nikko Securities, told Dow Jones Newswires.
0305 Seoul shares inched lower after a narrow, rangebound session, as investors consolidated gains in the wake of Wednesday’s rally that lifted shares to a 7-month high, while demand concerns from China weighed.
The Korea Composite Stock Price Index (KOSPI) was down 0.23 per cent at 2,040.29 points as of 0230 GMT.
“There isn’t a whole lot of momentum going anywhere, especially with lingering caution over oil prices and a weak yen as well as Wen’s rather downbeat note on the Chinese economy,” said Rhoo Yong-suk, an analyst at Hyundai Securities.
0210 Australian shares fell further through the morning, retreating from a two-week closing high as big miners fell over concerns that demand from China could weaken after Beijing said it needed to embrace slower, more sustainable growth.
BHP Billiton dropped 1.8 per cent and Rio Tinto fell 1.2 per cent, while several smaller miners such as Atlas Iron fell more than 2 per cent.
The market has been locked in a tight range between 4,150 and 4,300 since the start of the year, underperforming markets offshore, and appears unlikely to break out of that in the near term with the two biggest sectors, mining and banking, both facing weaker earnings growth.
“With loan books under pressure and commodity prices having softened, that is holding the market back,” said Michael McCarthy, chief market strategist at CMC Markets.
Mr McCarthy said moves by the Australian government to claw back planned corporate tax cuts were also adding to uncertainty, deterring investment in the share market.
The benchmark S&P/ASX 200 index fell 15 points to 4,271.9 as of 0123 GMT, down from Wednesday’s two-week closing high.
New Zealand’s benchmark NZX 50 index rose 1.1 per cent to 3,536.6 points, trading at nine-month highs.
0205 Chinese shares rose 0.36 percent in early trade, rebounding from sharp falls in the previous session after Premier Wen Jiabao said property controls would stay in place.
The benchmark Shanghai Composite Index, which covers both A and B shares, rose 8.60 points to 2,399.83.
Mr Wen, speaking at a news conference wrapping up a 10-day parliamentary meeting, said house prices were “still far from reasonable levels” and measures restricting property purchases would continue.
Property stocks fell in response to Mr Wen’s remarks and dragged the Shanghai Composite Index down by 2.63 per cent, the biggest single day decline since November last year.
0200 Hong Kong stocks opened flat, following a mixed performance on European and US markets after recent gains.
The Hang Seng Index edged up 7.53 points, or 0.04 per cent, to 21,300.36 in the first minutes of trade.
0105 The Australian and New Zealand dollars slipped to seven-week lows against a firmer US dollar as investors cut back long positions in commodity currencies to chase rising US yields.
The Aussie dollar slid to $1.0428, from $1.0450 in NY, extending hefty offshore losses. It briefly touched $1.0422, its lowest since January 20.
The NZ dollar fell to $0.8065, from NY’s $0.8081 having dipped as far as $0.8062. It had already slipped 1.6 per cent on Wednesday.
0011 Japan’s Nikkei average rose in early trade, extending the previous session’s rally which took the index to a close above 10,000 for the first time in seven months, as exporters advanced on the back of a weaker yen.
The Nikkei gained 0.7 per cent to 10,126.43, while the broader Topix rose 0.7 per cent to 862.88.
0010 Seoul shares opened nearly flat, as investors consolidated gains following a rally that lifted the benchmark index to a seven-month closing high on Wednesday.
The Korea Composite Stock Price Index (KOSPI) was up 0.17 per cent at 2,048.52 points as of 0004 GMT.
0001 Australian shares dipped in early trade over concerns that demand from China, the country’s biggest export market, could weaken after Beijing said it needed to embrace slower growth and bolder political reform to keep its economy from faltering.
Chinese Premier Wen Jiabao also doused expectations of any near-term easing of measures in the country’s property sector, a key consumer of metals. .
The benchmark S&P/ASX 200 index fell 6 points to 4,281.2 at 2312 GMT, down from a two-week closing high on Wednesday.
New Zealand’s benchmark NZX 50 index rose 0.8 per cent to 3,527.6 points, trading at nine-month highs.
Overnight on Wall St: US stock markets were mixed, failing to repeat Tuesday’s rally, when each of the three big indexes recorded their biggest gains of the year.
The Dow Jones Industrial Average rising 16.42 points to 13,2194.10 but the broad-market S&P 500 falling 1.67 points to 1,394.287.
The tech-heavy Nasdaq Composite added 0.85 points to 3,040.73.
0000 Welcome to rolling coverage from our Business and Foreign staff of the market turmoil and the latest on the world debt crisis. We will keep this blog updated as markets open and close around the world.