European stocks were little changed day, following three weeks of gains, as investors weighed the German election result. US index futures and Asian shares were also little changed. National Grid declined 1.6 per cent as UBS cut its rating on the stock. Aberdeen Asset Management climbed 1.9 per cent after forecasting full-year profit at the upper end of analyst projections. The Stoxx Europe 600 Index increased less than 0.2 per cent to 314.39 in London this morning.
Standard and Poor’s 500 Index futures added 0.2 per cent after the U.S. gauge retreated 0.7 per cent on Sept. 20. The MSCI Asia Pacific excluding Japan Index fell less than 0.1 per cent as Japanese markets were closed for a holiday. “The election resulted in a really strong chancellor, though one who is not yet able to govern,” said Michael Woischneck, who helps oversee about $1.6 billion in equities at Lampe Asset Management in Dusseldorf, Germany. “The Liberals being out of the lower house was a surprise and leaves no easy coalition partner for Merkel, as the SPD seems to be very reluctant. The negotiations between the two main parties may not be as smooth as people had hoped, which could force some market jitters.”
German Chancellor Angela Merkel won 41.5 per cent of the vote in her bid for a third term as leader of Europe’s largest economy, according to results from all 299 districts after yesterday’s election. That still leaves her short of a majority, with Merkel needing to find a coalition partner after the Free Democrats failed to win seats in the lower house of parliament.
The Stoxx 600 has gained 5.7 per cent so far in September, on course for the biggest monthly gain in almost two years. The gauge advanced for a third week last week, extending its rally this year to 12 per cent, after the Federal Reserve unexpectedly refrained from reducing its monthly asset purchases. Fed members Dennis Lockhart, William C. Dudley, and Richard Fisher are scheduled to speak in the US today.
Euro-area services and manufacturing growth accelerated to the fastest in more than two years in September as demand improved. A composite index based on a survey of purchasing managers in both industries rose to 52.1 from 51.5 in August, Markit Economics said. The retreat by European bears is turning into a rout as equity traders reduce bets against the region’s stocks by about $80 billion to the lowest level in at least seven years.
Bloomberg
