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European stocks rebound ahead of Fed decision

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(GlobalPost/GlobalPost)

European stock markets rebounded on Monday after heavy losses last week on firm confidence data from the eurozone and the United States and despite concerns over US monetary policy.

London's benchmark FTSE 100 index rose 0.98 percent to stand at 6,503.17 points in afternoon trading.

Frankfurt's DAX 30 jumped 1.75 percent to 9,163.67 points and the CAC 40 in Paris gained 1.52 percent to 4,121.54 compared with Friday's closing values.

"The FTSE has started the last full week of 2013 on a positive note ... shrugging off PMI misses from France and China to post gains after the miners reversed early losses to move into the green as well," said Toby Morris, senior sales trader at CMC Markets.

"Unsurprisingly, many headlines have been grabbed by expectations for this week's all important Fed meeting, but given how much traction the case for a December taper has gained in recent weeks, any move from the Fed isn't likely to come as the huge surprise."

In foreign exchange trading, the euro rose to $1.3767 from $1.3742 late in New York on Friday.

The European single currency gained to 84.40 pence from 84.30 pence on Friday. The British pound climbed to $1.6312 from $1.6295.

Gold prices dipped to $1,229.50 an ounce on the London Bullion Market from $1,232 on Friday.

Business activity in the 17-nation eurozone ticked up in December, but the recovery is uneven and weak French data of particular concern, a key survey showed on Monday.

Markit Economics said its Eurozone Composite Purchasing Managers Index (PMI) for December rose to 52.1 from 51.7 in November.

China's manufacturing activity in December meanwhile expanded at its slowest rate in three months, British banking giant HSBC revealed on Monday.

The bank's preliminary PMI for the world's second-biggest economy came in at 50.5 for the month, down from a final reading of 50.8 in November and the lowest since September.

US stocks Monday opened solidly higher, rallying after last week's losses and ahead of this week's US Federal Reserve policy meeting.

Five minutes into trade, the Dow Jones Industrial Average shot up 0.88 percent) to 15,893.69 points.

The broad-based S&P 500 advanced 0.69 percent to 1,787.59, while the tech-rich Nasdaq Composite Index rose 0.60 percent to 4,025.01 points.

Asian stock markets ended mostly lower on Monday as dealers bet that the US Federal Reserve will announce a cut in its stimulus programme at its policy meeting this week.

The dollar slipped in Asia as investors adjusted positions before the meeting, while the yen strengthened.

Trading has largely been driven over the past week by what investors think the Fed will do at its two-day meeting that ends on Wednesday, with opinion split on whether it will begin winding down its bond-buying programme this month or early next year.

A series of upbeat figures from Washington -- including falling unemployment and strong third-quarter growth -- as well as pro-cut comments from Fed officials have made a "taper" seem more likely.

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http://www.globalpost.com/dispatch/news/afp/131216/european-stocks-rebound-ahead-fed-decision