POSTED: 3:00 a.m. HST, May 2, 2013
LONDON (AP) — An interest rate reduction from the European Central Bank helped shore up markets Thursday despite concerns over the state of the U.S. and China economies, the world's two biggest.
The central bank, which sets interest rates for the 17 European Union countries that use the euro, cut its benchmark rate by a quarter of a percentage point to a new record low of 0.5 percent. The decision was widely anticipated following a grim run of economic data for the eurozone.
Now investors are waiting to see what ECB President Mario Draghi says in his upcoming press conference in Bratislava, the capital of Slovakia. In particular, they will watch out for any extra measures the ECB takes to shore up growth, such as a lending program for small and medium-sized companies, or SMEs.
"Measures to ease credit conditions for SMEs would be more useful, and cause a stronger market reaction," said Andrea Cicione, an economist at Lombard Street Research.
Ahead of that briefing, European stocks and the euro were firm, a day after much of the continent was closed for business for the May Day holiday.
Germany's DAX was up 0.4 percent at 7,946 while the CAC-40 in France rose 0.2 percent to 3,863. The FTSE 100 index of leading British shares was flat at 6.451. Britain does not use the euro, which was trading 0.2 percent higher at $1.3207.
Wall Street was poised for a solid opening after a big retreat on Wednesday following a soft private payrolls report from ADP and another lackluster manufacturing survey from the Institute for Supply Management. Dow futures and the broader S&P 500 futures were 0.4 percent higher.
Before U.S. markets open, investors will have weekly jobless claims to digest. They could be even more important than usual given that they will be published a day before the big economic release of the week, the monthly U.S. nonfarm payrolls report. A private payrolls report from ADP on Wednesday dented optimism over Friday's data.
Earlier in Asia, Japan's Nikkei 225 index fell 0.8 percent to close at 13,694.04 while South Korea's Kospi lost 0.4 percent at 1,956.39. Hong Kong's Hang Seng shed 0.3 percent to 22,668.30.
Oil prices were flat with the benchmark New York rate up 50 cents at $91.53 a barrel.