Asian stocks gained on Wednesday, as the Australian economy grew at a faster pace in the first quarter but, the gains are being capped ahead of Spanish bank worries and the ECB interest rate meet. The SGX Nifty is trading higher by 26 points, tracking other peers.
On the Economic front, the ECB will announce its Interest rates, which are expected to remain unchanged at 1.00%. The ECB president’s conference after the meet will be closely watched and is expected to give direction to the euro. From the US, we have the Nonfarm Productivity, which is expected to decline to -0.70% and could hurt the USD later today.
U.S. stocks finished higher Tuesday, but the gains were limited as investors weighed an upbeat U.S. economic report against Europe’s ongoing debt problems. Dow Jones rose 26 points, or 0.2%, snapping a four-session losing streak. S&P 500 added 7 points, or 0.6%, and Nasdaq rose 18 points, or 0.7%.
A better-than-expected reading of the ISM Services index gave markets a lift. The index for May rose to 53.7, surprising economists who had forecast the index would fall to 53.1 from April’s 53.5.
But ongoing concerns about Europe’s debt problems kept the gains in check, as the Spanish banking system teeters on the edge of collapse and Greece comes closer to a possible exit from the euro.
European equity markets edged lower in a volatile session on Tuesday, as investors balanced the uncertain prospects of decisive stimulus steps from G7 policymakers, concerns about the eurozone crisis and a darkening technical picture. DAX in Germany slipped 0.2%, while France’s CAC 40 rose 1.1%. London’s stock market was shut in celebration of the Queen’s Diamond Jubilee.
The Euro dropped against the US Dollar on Tuesday as fears over Spain escalated after the country warned about its access to credit markets and a meeting of Group of Seven finance chiefs offered no action to assuage investors.
Oil for July delivery rose 31 cents to settle at $84.29 a barrel what gold futures for August delivery rose $3 to $1,616.90 an ounce.