By James Langton
(March 20 – 09:00 ET) – Markets appear set for a cautious open. Traders are subdued ahead of tomorrow’s U.S. Federal Reserve Board meeting. That meeting is expected to produce a 25 basis point rise with the Bank of Canada following suit on Wednesday. Traders though are wary of a 50 bps move and whatever the Fed’s accompanying policy statement may reveal.
Overnight in Asia the Japanese market was closed. Hong Kong was open. It ticked higher. Traders were worried that this weekend’s elections in Taiwan would produce some serious instability in the region. Despite the fact that an independence advocate was elected, China appears to be calm at this point. With tension easing the market breathed a sigh of relief after a down opening. The Hang Seng index closed up 151.5 points to 17,234.
In Europe markets are up too on talks of telecom mergers. Bank and drug stocks are also doing well. London’s FTSE is up 66 points to 6,624. France’s CAC 40 has added 75 points to 6,379. The German is up strongest, 128 points to 7,839.
European consumer inflation was reported up 0.4% for February, higher than expected. The number has economists speculating that the European Central Bank will have to keep raising rates there too.
All sorts of telecom merger talk is being bandied about, most notably a deal involving Telefonica SA and Mobilcom AG. The other big news out of Europe is that the rumoured merger of the French, Dutch and Belgian stock exchanges has been confirmed. The deal will create the region’s second-biggest market after London.
In U.S. merger news, National Commerce Bancorp. is buying CCB Financial Corp., which owns the Central Carolina Bank and Trust Co., for about US$1.94 billion in stock.