European bourses waver on eve of key ECB meeting

European shares wavered yesterday after losses in Asia, as investors remained cautious on the eve of a highly anticipated policy meeting at the European Central Bank. London’s FTSE 100 index of top companies dipped 0.20% at close to 5,643.71 points while in Frankfurt the Dax 30 won 0.46% to 6,964.69 points and in Paris the CAC 40 rose by 0.20% to 3,405.79 points. Madrid added 0.41% and Milan edged up 0.13%. US stocks also wobbled in early trade yesterday amid hopes that increasingly weak global economic data will spur central banks into action. The Dow Jones Industrial Average was up 0.32% in midday trade, the S&P 500-stock index edged up 0.13%, while the tech-rich Nasdaq gained 0.11%. Dealers meanwhile looked ahead to today’s European Central Bank meeting, with all eyes on president Mario Draghi for new measures to fight the stubborn debt crisis. Market movement came “as persistent global economic growth concerns are being met with optimism that the European Central Bank is about to embark on the resumption of its bond purchase programme,” Charles Schwab & Co analysts said. Dealers have been broadly upbeat since Draghi in July hinted at a restart of its sovereign bond-buying programme to help under-pressure eurozone nations suffering high borrowing costs. And expectations were stoked on Monday after European lawmakers said Draghi had told them that buying government bonds of up to three-year maturity on the secondary market did not amount to bailing out spendthrift euro members. Such a move in the past was justified to help stabilise and protect the 17-nation eurozone, he said, according to the politicians. In currency markets, the euro reversed earlier losses and rose sharply yesterday. The euro was last up 0.3% at $1.2604, heading back to the two-month high of $1.2636 touched on Friday. Volume was said by traders and analysts to be light which may be exacerbating price swings. The euro has risen from a two-year low of $1.2040 in late July since ECB chief Mario Draghi pledged he would do everything to preserve the currency, suggesting possible intervention in bond markets to lower peripheral countries’ borrowing costs. Data on Wednesday confirmed French and German services sectors contracted in August, showing the economic rot was spreading well beyond the periphery and raising the chances of the ECB cutting interest rates in coming months. The dollar was steady at 78.38 Japanese yen. The Australian dollar hit an eight-week low against the US dollar on speculation the Reserve Bank of Australia will cut interest rates to cushion the economy from falling commodity prices. The euro rose to its highest against the Swiss franc since May 24. It was last at 1.2030 francs. From gulf times.