European shares shaken by Brexit jitters after gains in Asia

By The Canadian Press
March 21, 2019 - 1:45am

BANGKOK — Shares were mixed in Europe on Thursday after a day of gains in Asia spurred by the Federal Reserve's promise not to raise interest rates during this year.

Britain's FTSE 100 added 0.2 per cent to 7,307.87 while the DAX in Germany lost 0.5 per cent to 11,545.93. The CAC 40 in France slipped 0.2 per cent to 5,374.08.

The outlook for Wall Street was cloudy, with the future contract for the Dow Jones Industrial Average down 0.2 per cent to 25,667.00 and that for the Standard & Poor's 500 also down 0.2 per cent, at 2,282.90.

British Prime Minister Theresa May was trying to persuade European Union leaders on Thursday to delay the United Kingdom's departure from the bloc by up to three months just eight days before its scheduled split.

May will meet the 27 national other EU leaders at a summit in Brussels, a day after she wrote requesting an extension to the Brexit deadline until June 30. EU Council chief Donald Tusk, who is overseeing the summit, said a short delay should be possible, but only if Britain's Parliament approves May's twice-rejected divorce deal with the EU before the scheduled March 29 departure date.

Shares advanced across Asia on Thursday after the Federal Reserve said it has ruled out interest rate increases for this year.

The Shanghai Composite index rose 0.9 per cent to 3,119.72 while Hong Kong's Hang Seng gained 0.2 per cent to 29,371.12. South Korea's Kospi climbed 0.5 per cent to 2,187.71, while Australia's S&P ASX was flat at 6,167.20.

Markets in Japan and India were closed for national holidays.

The Fed's decision to put rate increases on hold is a marked change from three months ago, when the central bank projected two rate hikes in 2019. The move comes as Fed officials project that the U.S. economy will grow more slowly this year and in 2020, a change from the panel's projections just three months ago.

"There is clear evidence the Fed are trying to get in front of the economic story and boost inflation expectations," Chris Weston of IG said in a commentary.

The dollar dropped to 110.33 Japanese yen from 110.70 yen on Wednesday. It had been hovering above 111 yen. The euro dropped to $1.1395 from $1.1414.

Benchmark U.S. crude oil lost 10 cents to $60.13 per barrel in electronic trading on the New York Mercantile Exchange. News of tighter supplies of oil and continued production cuts helped to push the price above $60 per barrel overnight. Brent crude gained 2 cents to $68.52 per barrel.

The price of oil has been rising since Christmas Eve, when it hit a low of just over $42 per barrel. That followed a 44 per cent plunge since October 3, when it hit a high of just over $76 per barrel.

Elaine Kurtenbach, The Associated Press

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