European and US stock markets were mostly stronger yesterday before a US Federal Reserve interest rate decision, as investors took account of slowing eurozone growth and a batch of company results.
Traders forecast the Fed to deliver its first rate cut in ten years later in the day, despite data pointing to strong consumer confidence and rising home sales.
“The US central bank (is) expected to cut rates for the first time in a decade, but given the high expectations there is plenty of scope to disappoint,” said XTB analyst David Cheetham.
The British pound regained composure against the euro and dollar, having plumbed two-year lows this week on heightened no-deal Brexit fears.
London’s stock market index was an outlier, giving up 0.9 per cent in afternoon trading, with Lloyds bank shedding more than three per cent on news of sliding first-half profits.
Frankfurt added 0.4 per cent and Paris inched up by 0.2 per cent even as official data showed that eurozone economic growth slowed to 0.2 per cent in the second quarter, down from 0.4 per cent in the previous three months.
Air France-KLM gave the Paris index a lift, with its shares soaring more than eight per cent as second-quarter profits climbed in a challenging sector.
Airbus stock gained 0.6 per cent as the European aerospace giant reported profits more than doubled in the first half.
Elsewhere, Asia equities flagged earlier as the latest round of US-China talks on their bruising trade war came to an end in Shanghai. Washington and Beijing have so far hit each other with punitive tariffs covering more than $360 billion in two-way trade.
US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin finished two-day talks with their counterparts in China’s financial capital yesterday. The talks were relatively brief and the Washington delegation left for the airport earlier than expected without speaking to reporters.
Expectations began low and took a further hit after US President Donald Trump launched an attack on Beijing’s negotiators which also rocked Wall Street traders.
“My team is negotiating with them now, but they always change the deal in the end to their benefit,” Mr Trump tweeted.