An employee passes share price information displayed on an electronic ticker board inside the London Stock Exchange Group’s offices in London, the UK. Picture: BLOOMBERG VIA GETTY IMAGES/LUKE MACGREGOR
The FTSE Eurofirst 300 index was trading flat, Britain’s FTSE 100 index dipped 0.3% and Germany’s DAX 30 fell 0.3%.Markets were shaken early by a sudden dive in gold as a break of $1,750 triggered stop loss sales to take it as low as $1,684 an ounce. It was last down 1% at $1,745. They were helped by China's blue chips index which added 1.3%. Japan’s Nikkei was shut but futures were trading a modest 20 points below Friday’s close.Chinese trade data out over the weekend undershot forecasts, while figures out Monday showed inflation slowed to 1% in July offering no barrier to more policy stimulus.
“What we’re seeing is a little bit of early profit-taking on the back of fear that tapering will come in earlier in September. But as you can see, it has little impact because the effect of a better economy far outweighs the substitution effect of higher interest rates,” said Sebastien Galy, senior macro strategist at Nordea Asset Management.
Figures for July CPI due this week are also expected to confirm inflation has peaked, with prices for second-hand vehicles finally easing back after huge gains. “However, companies with earnings beats have seen muted reactions on their stock price the day following earnings releases, and misses have been penalised,” they wrote in a note.