European stocks were mixed in early trading on Friday after cautious Asian markets put a dampener on the recent equity rally, in a move attributed to profit-taking after a busy week.
A surprise rate cut from Switzerland's central bank on Thursday helped push markets to new highs, as traders realised that major central banks around the world would not necessarily wait for US Federal Reserve rate cuts before delivering their own.
Wall Street rallied overnight, with all three major indexes extending their streak of record highs. But sentiment turned more cautious during Asian trading hours. China's yuan dropped sharply, hitting a four-month low, in a move analysts attributed to rising expectations that there will be more monetary easing to prop up the country's economy. Chinese shares fell, dragging down markets more broadly.
At 1007, the MSCI World Equity Index was down 0.1 per cent on the day, but up 1.9 per cent on the week as a whole, on track for its biggest weekly gain so far this year. Europe's STOXX 600 was up 0.1 per cent, touching a new all-time high, while London's FTSE 100 was up 0.9 per cent. MSCI's Europe index was down 0.2 per cent and France's CAC 40 was also down 0.2 per cent.
In a busy week for markets, traders drew confidence not only from Switzerland's rate cut on Thursday, but also from the Bank of England being more dovish than expected. The BoE said the economy is "moving in the right direction" for it to start cutting rates.
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