LONDON, Dec 18 (Reuters) - European stocks were expected to edge higher at
the open on Wednesday as investors squared their positions before German
business morale data and a Federal Reserve decision on its equity-friendly
Financial spreadbetters expect Britain's FTSE 100 to open 15 to 17
points higher, or as much as 0.3 percent, Germany's DAX to open 20 to
29 points higher, or as much as 0.3 percent, and France's CAC 40 to open
9 to 10 points higher, or 0.3 percent.
The indexes have fallen between 3 and 6 percent in recent weeks as strong
U.S. data fuelled speculation the Fed may trim its asset purchase programme,
which has curbed returns on debt and driven money into stocks since September
The central bank's Federal Open Market Committee is due to announce its
decision at 1900 GMT on Wednesday, with most economists not expecting the Fed to
start winding down its purchases of $85 billion a month in bonds until March.
Around 52 percent of FTSE 100 positions opened on IG's platform this week
were 'short', or bets the index will fall, compared to just 33 percent of total
Possible share price volatility around the Fed announcement meant some
investors were closing their positions and taking profit on the negative bets.
'Although some pundits will put (Wednesday's expected higher open) down to
traders betting that there will be no tapering, it's probably no more than some
shorts squaring their books ahead of the FOMC,' Jonathan Sudaria, a dealer at
Capital Spreads, said in a trading note.
'The major European indices have lost a fair amount of ground since putting
in their annual highs so it's only prudent that the bears book some of their
profits before an event which could potentially catapult the indices back into
Before the Fed announcement, investors will be monitoring the Ifo German
business morale survey, due to be published at 0900 GMT, with expectations for a
strong reading mounting after the ZEW German analyst and investor sentiment
survey surged far more than forecast on Tuesday.
> Asian shares creep up, dollar steady as Fed decision looms
> Wall St ends slightly lower on day before Fed statement
> Nikkei rises as investors sanguine ahead of Fed
> TREASURIES-Prices rise after 2-year note auction
> FOREX-Dollar on defensive as Fed verdict looms
> Gold holds ground ahead of Fed decision on stimulus
> METALS-Copper edges down for 2nd day ahead of Fed outcome
> Brent holds above $108 ahead of Fed decision on stimulus
(Reporting By Francesco Canepa, editing by Elizabeth Piper)
Keywords: MARKETS EUROPE FACTORS
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