By Dow Jones Business News, September 20, 2013, 04:55:00 AM EDT
European financial markets calmed down Friday, with stocks falling slightly as investors paused for breath after a
tumultuous day of trading following the Federal Reserve's decision to stand pat on stimulus.
Europe's benchmark Stoxx 600 index was down 0.1%. The U.K.'sFTSE 100, Germany's DAX and France's CAC 40 were all off
Bonds were virtually unchanged, with 10-year gilts yielding 2.9% and 10-year Bunds yielding 1.86%.
Global stocks and bonds surged Thursday as the Fed's announcement that it would continue its monthly $85 billion bond
purchases flew in the face of most investors' expectations for a reduction.
"Investors have seen enough for the time being as they head towards the weekend break to ponder what the Fed knows
that they don't," said Mike McCudden, head of derivatives at Interactive Investor. "Furthermore, equities have had a
great rally of late but with U.S. budget negotiations now taking the limelight it's probably a good time to lock in some
profits and head for the sidelines."
India's Sensex, meanwhile, fell 2.5% after the central bank surprised by raising its key lending rate by a quarter
The Reserve Bank of India raised its repo rate to 7.5% from 7.25%, in a bid to guard against inflation, fuelled partly
by the rupee's sharp decline against the dollar in recent months. The rupee was flat against the dollar at 62.18.
In corporate news, shares in German sportswear maker Adidas slid 4% after the company lowered its full-year guidance,
pointing to the depreciation of several currencies against the euro.
German utility RWE fell 2% after saying it will have to tighten its belt to turn around its fortunes, announcing plans
to wring out more savings and cutting its dividend.
In London, shares in estate agency Foxtons were trading at 280p, up 22% from the IPO offer price of 230p a share.
It is looking to be a pretty quiet day in terms of data, with no U.S. releases of note due. However, eyes will be on
speeches by St Louis Fed President James Bullard, Kansas City Fed President Esther George and Federal Reserve Governor
Daniel Tarullo for any further comments on the Fed's decision to keep monetary stimulus intact.
Investors in Europe will also be looking ahead to German federal elections on Sunday. ABN Amro said that the most
likely outcome is a stable government, led by Angela Merkel.
Write to Michele Maatouk at email@example.com
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