Offshore Onshore Mag

* Equities fall on concern of rising interest rates







Yesterday, European equities fell, with banks, utilities and other stocks sensitive to rising interest rates at the forefront of the losses. With decisions from both the European Central Bank and the Bank of England, the market was focused on the outlook for interest rates. The Bank of England lifted rates by 25 basis points to 5.75 per cent, as expected. The European Central Bank left its main interest rate unchanged at four per cent but is expected to signal that at least one more quarter percentage point rise is likely this year, possibly in September.

The FTSE Eurofirst 300 fell 0.3 per cent, Frankfurt's Xetra Dax lost 0.5 per cent and the CAC 40 in Paris fell 0.2 per cent. The FTSE 100 dipped 0.1 per cent to 6,668.0 a fall of five points.

The news took UK rates to a six-year high, with further rises still priced into interest rate futures.

Overnight strength in European shares helped push up Japanese stocks yesterday morning. The Nikkei 225 finished the day up 0.3 per cent as did the broader Topix.

US stock-index futures were little changed before reports that may provide evidence on the strength of the economy and the outlook for interest rates.

The financial news was compiled by Valletta Fund Management (Tel. 8007 2344) and Bank of Valletta plc (Tel. 2131 2020). BOV and VFM are licensed by the MFSA to conduct investment services business.