New York (AFP) – British stocks dipped Wednesday after data suggested an economic hit from the Brexit vote just ahead of a key Bank of England policy decision.
Stocks were mixed elsewhere in Europe, while US stocks gained and Japanese stocks tumbled again on worries about government stimulus.
Data monitoring company Markit’s preliminary composite purchasing managers’ index (PMI) in Britain for the services industry sank to 47.4 points in July, down from 52.3 in June. A reading under 50 indicates shrinkage.
The data revived worries about the surprise British vote in June to exit the European Union, sending the FTSE down 0.2 percent.
“This week’s manufacturing PMI report is the latest in a long list of survey data which shows that the vote to leave the EU has caused significant uncertainty, and negative shock is on the way,” said Hargreaves Lansdown economist Ben Brettell.
Market watchers expect the Bank of England Thursday to slash interest rates to a record-low 0.25 percent and to potentially boost its bond-buying stimulus program.
“The market anticipates at least a quarter-point cut in the base rate, but an expansion of asset purchases and a ‘bias to ease’ would not be surprises,” said economist Larry Hatheway at asset manager GAM.
In the US, payroll firm ADP reported that private US companies added 179,000 jobs in July, slightly better than expected. The data came two days ahead of the government’s official July jobs report.
Analysts said US stocks were also boosted by higher oil prices, which lifted most petroleum-linked shares that helped boost the S&P 500 by 0.3 percent.
Paris fell 0.2 percent and Frankfurt rose 0.3 percent after Markit said eurozone economic data managed a small gain in July despite Brexit.
– Weak stimulus hits Nikkei –
Japan’s Nikkei dropped 1.9 percent, its second straight decline, as gripes about a surprisingly modest stimulus package continued to dent sentiment.
Japanese banking shares tanked on fears about the difficulty lenders face making money in a negative interest rate era as their bottom lines come under pressure.
Mitsubishi UFJ Financial Group closed 3.9 percent lower, rival Sumitomo Mitsui Financial Group dived 4.3 percent and Mizuho Financial Group lost 3.3 percent.
Banking giant HSBC ended 1.8 percent higher in Hong Kong and up more than four percent in London after it announced a $2.5 billion stock buyback and said it would maintain its dividend.
In Milan, Fiat Chrysler shares surged over eight percent following a press report claiming that the auto giant is talking to Samsung about selling its car parts unit Magneti Marelli.
In the US, Time Warner climbed 2.7 percent after announcing it was taking a 10 percent stake in Hulu, a streaming video provider that is ramping up as a competitor to sector leader Netflix.
– Key figures at around 2100 GMT –
New York – DOW: UP 0.2 percent at 18,355.00 (close)
New York – S&P 500: UP 0.3 percent to 2,163.79 (close)
New York – Nasdaq: UP 0.4 percent to 5,159.74 (close)
London – FTSE 100: DOWN 0.2 percent at 6,634.40 (close)
Frankfurt – DAX 30: UP 0.3 percent at 10,170.21 (close)
Paris – CAC 40: DOWN 0.2 percent at 4,321.08 (close)
EURO STOXX 50: UP 0.2 percent at 2,911.21
Tokyo – Nikkei 225: DOWN 1.9 percent at 16,083.11 (close)
Shanghai – Composite: UP 0.2 percent at 2,978.46 (close)
Hong Kong – Hang Seng: DOWN 1.8 percent at 21,739.12 (close)
Euro/dollar: DOWN at $1.1148 from $1.1224
Pound/dollar: DOWN at $1.3316 from $1.3354
Dollar/yen: UP at 101.25 yen from 100.90
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