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European and Australian markets felt the effects of rising euro

European and Australian markets felt the effects of rising euroThe European stocks markets dropped on Thursday as Lufthansa and Immofinanz lost its shares in the updates produced by the US Federal Reserve. This update plays a major role in boosting commodity share prices in the market. Lufthansa is today’s Europe’s largest airlines while Immofinanz is a huge Australian property development company based in Vienna but operates in the Eastern and Central Europe.

Today, the pan-European FTSEurofirst 300 index fell 0.5 percent following the same drop off percentage with the euro zone’s blue-chip Euro STOXX50 in markets. These data are results of a stronger euro which made it harder for European companies to sell their goods overseas. The Federal Reserve held its interest rates steady on Wednesday indicating a moderate U.S. economic growth and strong job gains. These projections are enough for Fed to tighten its policy this year expecting for a two quarter-point hikes at the end of the year.

According to Ion-Marc Valahu, Clairinvest Fund Manager, “Stocks are moving lower on the back of the euro’s advance. We’re just consolidating some of the gains made over the last month”. This statement clearly implies to what is happening today that led the European indices to fell down. Among its major contributors, Lufthansa and Immofinanz took the lead with the drop of 5.6 percent and 9 percent respectively.

On the other hand, mining industries and energy companies are among the market’s best performers today. Based on Reuters’ daily report, “British miner Anglo American surged 10 percent, while oil majors such as BP and Total also rose as oil prices advanced”. This is after the world’s biggest suppliers strengthened its plans to meet to discuss possibilities of freezing oil production. The Australian stock market was also affected by this event falling 0.8 percent today, with the Immofinanz listed as its major contributor, disappointing investors.

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