LONDON: Better-than-expected business confidence in Germany helped Frankfurt buck a sliding trend across most European stock markets on Monday (Oct 26), as investors booked gains made last week and waited for clues on US monetary policy.
London’s benchmark FTSE 100 index of leading blue-chip companies shed 0.42 per cent to 6,417.02 points. In the eurozone, the Paris CAC 40 gave up 0.54 per cent compared with Friday’s close to 4,897.13 points.
On the upside, Frankfurt’s DAX 30 managed a gain of 0.06 per cent to 10,801.34 after a top survey showed that German business confidence dropped less than expected during October.
Before the weekend, the region’s markets had rallied on expectations of further economic stimulus for the eurozone, and after China slashed interest rates to counter the slowdown in the world’s second-biggest economy.
“A third day of gains was always going to be tough without much on the calendar and following a week that saw European shares rise five per cent,” said Jasper Lawler, market analyst at CMC Markets UK.
But a smaller than expected dip in German business confidence bolstered sentiment on the country’s benchmark stock index as “exporters listed on the DAX stand to benefit the most from a combination of a lower European exchange rate and higher demand that could result from China’s rate cut.
German business confidence dipped only slightly in October, as Europe’s biggest economy continues to shrug off various challenges, including the Volkswagen scandal, the leading economic think tank Ifo said on Monday.
The Ifo institute’s closely-watched business climate index slipped to 108.2 points in October from 108.5 points in September, Ifo said in a statement, a much shallower drop than analysts had expected.
