Europe recovers from Brussels-driven losses

LONDON, March 23: European stock markets bounced back on Wednesday from the concerns over security that have dominated the past 24 hours, helped by a handful of more positive signals on the health of the world’s major economies.
Some Asian markets fell earlier in subdued trading as investors pulled back on positions ahead of the long Easter weekend, opting for caution following the suspected Daesh (Islamic State) suicide bomb attacks in Brussels.
But the pan-European FTSEurofirst 300 index rose half a percent as all of its major markets gained solidly, helped by a vote of approval from investors for cost cuts announced by one of Switzerland’s two big international banks, Credit Suisse.
A handful of better-than-expected readings of business sentiment in Europe on Tuesday had already helped markets resist deeper falls following the bomb attacks in Brussels. There was also further support overnight from Federal Reserve policymakers for the US central bank being able to plough ahead with rises in interest rates this year. “A sign of resilience and perhaps a degree of pent up tolerance to such tragic events has led to a flat to mildly positive opening in Europe,” said Brenda Kelly, head analyst at London Capital Group. “(But) I would not say that risk is definitively back on.”
MSCI´s broadest index of Asia-Pacific shares outside Japan fell almost 0.5 percent, its first decline in six days.
Japan’s Nikkei surrendered earlier gains to close down 0.3 percent but Chinese shares gained around 0.4 percent.
Britain’s pound was the bigger loser among major currencies after the Brussels attacks, hit by concern that it would bolster the campaign for a vote to leave the European Union in June’s “Brexit” referendum.
It was back on the defensive against the dollar on Wednesday and derivatives allowing investors to insure themselves against sharp moves in sterling exchange rates ahead of that vote soared. The dollar has taken substantial support from the flow of comments from Fed officials over the past 48 hours, all essentially read as keeping alive the chances of a rise in its main interest rates in June.- REUTERS