- Title: European stocks mixed as commodities slide
- Date: 9th August 2021
- Summary: FRANKFURT, GERMANY (AUGUST 9, 2021) (REUTERS) FRANKFURT STOCK EXCHANGE TRADING FLOOR TRADERS WORKING DAX CURVE AT EARLY TRADING TRADER EARLY DAX AT 15,773.51 POINTS TRADING FLOOR WITH DAX BOARD MORE OF TRADERS VARIOUS OF BANK SHARES ARE SHOWN ON THE TRADING BOARD (SOUNDBITE) (German) ROBERT HALVER, HEAD OF CAPITAL MARKETS ANALYSIS AT BAADER BANK, SAYING: "The question is always: is the glass half full or half empty. Those who argue that the glass is half empty are saying there is inflationary pressure. We have the delta variant and August and September traditionally are not the best months on the stock market. But there are also those who are saying that the glass is half full. We have a global economy that is still going strong. Mr. Biden in the United States will get his infrastructure package and monetary policy is still saying inflation is there but we're not doing anything. The stock market is operating in this context of tension. A new all-time high is possible, but it is already becoming more difficult." HALVER TALKING TO TRADER HIGHEST DAX AT 15,798.51 POINTS (SOUNDBITE) (German) ROBERT HALVER, HEAD OF CAPITAL MARKETS ANALYSIS AT BAADER BANK, SAYING: "If the supply chains from China are affected, negatively affected we would have a problem because especially Germany like no other country gets so many preliminary materials from China. But the Chinese are trying to get this handled as smoothly as possible. In the conflict between the United States and China, they are of course trying to keep the Europeans on their side from a Chinese point of view. So I don't see a big threat. The problem is the inflationary pressure that is being built up. The preliminary products are becoming more and more expensive, but the central banks are not reacting to this. You could also say: imagine there is inflation and central banks don't react." VARIOUS OF TRADER LOWEST DAX AT 15,748.91 POINTS (SOUNDBITE) (German) ROBERT HALVER, HEAD OF CAPITAL MARKETS ANALYSIS AT BAADER BANK, SAYING: "Inflation already affects consumers. You can see it with purchase prices, you can see it with electricity prices, you can see it with real estate prices, and here at the stock market. It is there: inflation is no longer being addressed today. For investors, this means they have to deal with inflation. What does that mean: physical capital - shares, real estate, and gold." HALVER WALKING PAST WITH TRADING BOARD IN THE BACKGROUND TRADING BOARD SHOWING CHANGES TRADER TRADING BOARD PAN ACROSS TRADING FLOOR
- Embargoed: 23rd August 2021 09:45
- Keywords: China inflation markets stocks trade
- Location: FRANKFURT, GERMANY
- City: FRANKFURT, GERMANY
- Country: Germany
- Topics: Europe,Economic Events
- Reuters ID: LVA001EPK5C3X
- Aspect Ratio: 16:9
- Story Text:European stocks were mixed in early trading on Monday (August 9), as a fall in commodity prices weighed on UK's blue-chip index, while other regional indexes stayed near their recent highs with earnings season winding down.
The FTSE Eurofirst 300 index was trading flat, Britain's FTSE 100 index dipped 0.3% and Germany's DAX 30 fell 0.3%.
MSCI's All Country World Index, which tracks shares across 49 countries was flat on the day.
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.
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.
"If the supply chains from China are affected, negatively affected, especially for Germany, no country gets as many preliminary materials from China as Germany. If that were restricted, we would have a problem. But the Chinese are trying to get this handled as smoothly as possible. In the conflict between the USA and China, they are naturally trying to keep the Europeans on their side from the Chinese point of view. So I don't see a big threat," said Robert Halver, head of capital markets at Baader Bank, at the stock exchange in Frankfurt.
"The problem is the inflationary pressure that is being built up. The preliminary products are becoming more and more expensive, but the central banks are not reacting to this," he added.
Germany's Bundesbank President and ECB policymaker Jens Weidmann told the Welt am Sonntag newspaper on Sunday (August 8) the European Central Bank must tighten monetary policy if it needs to counter inflationary pressures and cannot be put off from doing so by the financing costs of eurozone states.
Eurozone countries have ramped up their borrowing to cope with the coronavirus pandemic, potentially leaving them exposed to increased debt servicing costs if the central bank tightens policy to counter upward pressure on prices.
After its July 22 policy meeting, the ECB pledged to keep interest rates at record lows for even longer to boost sluggish inflation and warned that the rapidly spreading Delta variant of the coronavirus posed a risk to the eurozone's recovery
(Production: Andreas BÃ¼rger, Tilman Blasshofer, Ulrike Heil)
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