Investors have welcomed US Treasury Secretary Steven Mnuchin's invite to Chinese officials for fresh trade talks
London (AFP) - Europe’s major stock markets wavered on Thursday before key interest rate decisions in the region.
In late morning deals, London stocks slid 0.4 percent while Frankfurt added 0.4 percent and Paris gained 0.2 percent.
The Bank of England (BoE) is due at 1100 GMT to reveal the outcome of its latest monetary policy gathering following a rate hike last month.
The European Central Bank (ECB) will follow suit at 1145 GMT.
Both institutions are not expected to alter key interest rates, but could allude to lingering uncertainty surrounding Britain’s scheduled exit from the European Union next March.
ECB chief Mario Draghi will likely continue his wait-and-see stance with eurozone inflation easing off, dealers said.
“Today sees the focus shift onto a central banking mindset, with… decisions from both the BoE and ECB,” said IG analyst Joshua Mahony.
“For the most part we are unlikely to see any shift in policy from either central bank, where US trade and Brexit fears continue to cast a shadow over growth expectations.
“Despite positive tones coming from US-EU negotiations, we remain within a fraught period in relations between the two economic powerhouses.
“With Draghi typically erring on the side of caution, the recent fall in eurozone inflation will allow him to approach things from a wait-and-see perspective given ongoing geopolitical fears, Mahony added.
In Turkey, the lira plunged by 3.5 percent against the dollar after President Recep Tayyip Erdogan on Thursday launched a blistering attack on Turkey’s central bank, calling for it to lower interest rates just hours before a monetary policy meeting.
The bank had been widely expected to raise rates this afternoon to calm economic turbulence after the lira nosedived in recent weeks and inflation soared to almost 18 percent, with analysts saying it could tumble further if interest rates are not hiked.
- Hong Kong spurs Asia rally -
In Asia, Hong Kong led a rally in most Asian markets after the US reached out to China in a fresh bid to avert a trade war, providing some much-needed respite to weary investors.
News that Treasury Secretary Steven Mnuchin had invited top Chinese officials for talks comes just under a week after Donald Trump threatened to impose tariffs on all $500 billion worth of imports from China.
The president’s top economics adviser Larry Kudlow called the move a “positive thing” and added that “you could say that communication has picked up a notch”.
China’s commerce ministry on Thursday welcomed the offer and said the two sides were discussing details.
Hong Kong’s Hang Seng Index jumped 2.5 percent, having fallen for six straight days and into a bear market, which is a 20 percent drop from its January record high.
Shanghai climbed 1.2 percent, Seoul gained 0.1 percent and Tokyo ended one percent higher.
Wellington, Taipei and Manila were also higher, while Jakarta ran up 0.9 percent and Bangkok 1.6 percent.
But Sydney fell 0.8 percent and Singapore eased 0.2 percent.
Energy firms also climbed with investors keeping tabs on Hurricane Florence as it surges towards the US east coast, with the Carolinas and Georgia in its crosshairs.
But crude prices fell as the strength of the storm’s winds dropped.
- Key figures around 1015 GMT -
London - FTSE 100: DOWN 0.4 percent at 7,284.54 points
Frankfurt - DAX 30: UP 0.4 percent at 12,080.73
Paris - CAC 40: UP 0.2 percent at 5,343.33
EURO STOXX 50: UP 0.3 percent at 3,336.10
Tokyo - Nikkei 225: UP 1.0 percent at 22,821.32 (close)
Hong Kong - Hang Seng: UP 2.5 percent at 27,014.49 (close)
Shanghai - Composite: UP 1.2 percent at 2,686.58 (close)
New York - Dow Jones: UP 0.1 percent at 25,998.92 (close)
Euro/dollar: DOWN at $1.1616 from $1.1626 at 2100 GMT
Pound/dollar: DOWN at $1.3043 from $1.3045
Dollar/yen: UP at 111.51 yen from 111.26 yen
Oil - Brent Crude: DOWN 65 cents at $79.09 per barrel
Oil - West Texas Intermediate: DOWN $1.02 at $69.35 per barrel