European stocks higher, LOreal enjoys lift
The dollar weakened against the euro and yen, with analysts questioning the chances of a third US interest rate hike this year
AFP
AFP, LONDON: European stock markets rose Friday heading into the weekend pause, with Paris boosted by a strong rise in LOreals share price.
Asian stock markets turned lower earlier Friday as investors cashed in at the end of a mostly positive week.
The dollar meanwhile weakened against the euro and yen, with analysts questioning the chances of a third US interest rate hike this year.
Around 1030 GMT, Londons benchmark FTSE 100 stocks index was up 0.1 per cent compared with the close on Thursday.
In the eurozone, Frankfurts DAX 30 index gained 0.1 per cent and the Paris CAC 40 won 0.3 percent.
Shares in French cosmetics giant LOreal jumped nearly 5.0 per cent at the start of trading. Around 1030 GMT, the stock was up 3.5 per cent at 182.85 euros.
Investors bet on a possible ownership change at the company following the death Wednesday of the French cosmetic companys heiress Liliane Bettencourt, who was 94.
As LOreals principal shareholder, Bettencourt was the 14th richest person in the world, according to Forbes magazine, which estimated her net worth in March at $39.5 billion.
The death of Liliane Bettencourt opens the door for Nestle to up their stake in LOreal, brokers Liberum said in a note to clients Friday.
But it added: There is a lot of speculation at this stage: a possible scenario is that Nestle may acquire LOreal and there are other rumours that LOreal may buy back part of its stake from Nestle.
Focus in Asia was on renewed geopolitical worries after North Korea said it might consider testing a hydrogen bomb in the Pacific.
Rikiya Takebe, senior strategist at Okasan Online Securities, said the possibility of such a test prompted risk-off sentiment in the currency market.
Global equities had tracked broadly higher over the past five days on easing geopolitical tensions and Wall Street notched up several records.
At the same time, the dollar had rallied after the Fed announced a timetable to wind up its huge bond-buying stimulus programme and hinted at a third rate hike this year by December.
But Greg McKenna, chief market strategist at AxiTrader, said there was scepticism that the US central bank would be able to lift borrowing costs again this year at the same time as tapering its stimulus, which was put in place during the global financial crisis to keep long-term rates down.
Dealers headed into the weekend a little subdued also after New Yorks main indices fell Thursday, while a second downgrade of Chinas debt rating added to negative feeling. The agency slashed also Hong Kongs prime AAA rating Friday.
Investors will be keeping an eye this weekend on speeches by top Fed officials, hoping they will give some clues about the central banks thoughts on interest rates.
On oil markets, prices rose gently Friday with eyes on a weekend Vienna meeting of oil producing nations inside and outside of OPEC to discuss an ongoing production cut that may be extended.
