European stocks remain lower despite U.S. agreement; Dax down 0.45%

European stocks remained lower on Thursday, as concerns over the effects of the U.S. government shutdown on the economy overshadowed news of a last minute debt deal to avert a sovereign default. 

During European afternoon trade, the EURO STOXX 50 slid 0.31%, France’s CAC 40 shed 0.30%, while Germany’s DAX 30 shed 0.45%. 

Sentiment improved earlier, after the U.S. Congress passed a bill to reopen the government and raise the debt ceiling, just hours ahead of a deadline to avert a debt sovereign debt default.

The deal will fund the government until January 15 and raise the government borrowing limit until February 7. Both sides also agreed to talks over broad budget issues in an attempt to reach a longer-term deal by December 13.

However, investors remained concerned over the impact of the government shutdown on the already fragile economic recovery. The possibility of another debt crisis also loomed, as the temporary solution does not resolve the underlying budgetary issues dividing Republicans and Democrats. 

Financial stocks remained broadly lower, as French lenders BNP Paribas and Societe Generale slid 0.52% and 1.30%, while Germany's Deutsche Bank declined 0.83%. 

Among peripheral lenders, Spanish banks Banco Santander and BBVA retreated 0.34% and 0.73% respectively, while Italy's Unicredit and Intesa Sanpaolo fell 0.36% and 1.37%. 

Bloomberg reported earlier that BBVA was about to book a one-time loss of EUR2.3 billion against its earnings this year after writing down the value of its stake in China Citic Bank. 

Adding to losses, Outotec dove 15.31% after the Finnish supplier of smelters to mining companies cut its guidance for this year. 

In London, FTSE 100 slipped 0.10%, as U.K. lenders continued to track their European counterparts lower, while data showed that retail sales in the U.K. rose at a faster than expected rate in September. 

Shares in the Royal Bank of Scotland dropped 0.69% and Lloyds Banking lost 1.17%, while HSBC Holdings and Barclays plummeted 1.23% and 1.98% respectively. 

Meanwhile, mining stocks were mixed, as Glencore Xstrata saw shares slide 0.58% and Vedanta Resources tumbled 2.23%, while gold miner Randgold Resources rose 0.27%, erasing earlier losses, and Polymetal surged 7.33%. 

In the U.S., equity markets pointed to a lower open. The Dow Jones Industrial Average futures pointed to a 0.24% fall, S&P 500 futures signaled a 0.12% loss, while the Nasdaq 100 futures indicated a 0.01% dip. 

Later in the day, the U.S. was to publish a report on initial jobless claims and the Philly Fed manufacturing index.

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U.S. futures mixed to lower despite debt deal; Dow Jones down 0.21%

U.S. stock futures pointed to a mixed to lower open on Thursday, although the U.S. Congress struck a last minute agreement to raise the debt limit, avoiding a default, as concerns over the consequences of the two-week government shutdown overshadowed the news. 

Ahead of the open, the Dow Jones Industrial Average futures pointed to a 0.21% fall, S&P 500 futures signaled a 0.09% loss, while the Nasdaq 100 futures indicated a 0.02% gain. 

Sentiment improved earlier, after the U.S. Congress passed a bill to reopen the government and raise the debt ceiling, just hours ahead of a deadline to avert a debt sovereign debt default.

The deal will fund the government until January 15 and raise the government borrowing limit until February 7. Both sides also agreed to talks over broad budget issues in an attempt to reach a longer-term deal by December 13.

However, investors remained concerned over the impact of the government shutdown on the already fragile economic recovery. The possibility of another debt crisis also loomed, as the temporary solution does not resolve the underlying budgetary issues dividing Republicans and Democrats. 

Auto stocks were expected to be active, following reports Ford Motor will expand its F-Series truck line for the 2014 model year to protect a widening lead over General Motors. 

Ford shares were still down 0.35% in pre-market trade. 

Social media giant Facebook, up 0.11% in early trading, was also likely to be in focus after saying it is planning to loosen rules to let teens share their content publicly, in an attempt to woo younger members and stave off competition. 

Among earnings, American Express saw shares gain 0.33% after hours, as the credit-card issuer reported a third-quarter profit that beat analysts’ estimates, thanks to rising customer spending. 

International Business Machines 5.96% in extended trading, after the computer services provider said late Wednesday that sales fell for the sixth straight quarter and its hardware business posted a loss. 

Other stocks expected to be in focus included Goldman Sachs, Verizon Communications, Google, United Health and Union Pacific, all scheduled to report quarterly earnings later in the day. 

Across the Atlantic, European stock markets were lower. The EURO STOXX 50 slid 0.34%, France’s CAC 40 declined 0.39%, Germany's DAX retreated 0.47%, while Britain's FTSE 100 edged down 0.13%. 

During the Asian trading session, Hong Kong's Hang Seng Index shed 0.57%, while Japan’s Nikkei 225 Index climbed 0.83%. 

Later in the day, the U.S. was to publish a report on initial jobless claims and the Philly Fed manufacturing index.

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Dollar weakens as U.S. debt crisis ends

The dollar was broadly weaker against the other major currencies on Thursday as investors turned their attention to the economic impact of the U.S. debt crisis, overshadowing initial relief which greeted a deal to end the impasse.

During European late morning trade, the dollar was sharply lower against the yen, with USD/JPY dropping 0.72% to 98.03.

The dollar initially hit three-week highs against the yen after the U.S. Congress passed a bill to reopen the government and raise the debt ceiling, just hours ahead of a deadline to avert a debt sovereign debt default.

The deal will fund the government until January 15 and raise the government borrowing limit until February 7. Both sides also agreed to talks over broad budget issues in an attempt to reach a longer-term deal by December 13.

Bu the dollar weakened amid fears over the impact of the government shutdown on the already fragile economic recovery, which could prompt the Federal Reserve to the delay plans for scaling back its stimulus program until at least the start of next year.

The possibility of another debt crisis also loomed, as the temporary solution does not resolve the underlying budgetary issues dividing Republicans and Democrats.

Chinese rating agency Dagong cut its sovereign rating on the U.S. to A- from A on Thursday, fuelling fears that other agencies could follow suit. Fitch placed its triple-A rating on the U.S. on “rating watch negative” earlier this week.

The euro rose to two-week highs against the dollar, with EUR/USDadvancing 0.71% to 1.3631.

Elsewhere, the dollar fell to one-week lows against the pound, withGBP/USD jumping 0.79% to 1.6074.

Sterling extended gains after data released on Thursday showed that retail sales in the U.K. rose at a faster than expected rate in September.

The Office for National Statistics said U.K. retail sales rose 0.6% in September from a month earlier, compared to expectations for a 0.4% increase and were 2.2% higher on a year-over-year basis.

The dollar posted steep losses against the Swiss franc, with USD/CHFtumbling 1.11% to 0.9032.

The greenback was weaker against its Australian, New Zealand and Canadian counterparts, with AUD/USD up 0.56% to 0.9605, NZD/USDadvancing 0.62% to 0.8477 and USD/CAD losing 0.30% to trade at 1.0295.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, dropped 0.72% to 80.00. 

The U.S. was to publish a report on initial jobless claims and the Philly Fed manufacturing index later Thursday.

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