government shutdown. U.S. index futures and Asian shares also fell. KappAhl AB dropped 3.5 percent after the clothing retailer proposed paying no dividend this financial year. The Stoxx Europe 600 Index slipped 0.4 percent to 311.73 at 8:08 a.m. in London. The equity benchmark jumped 0.8 percent yesterday as a senior minister in Silvio Berlusconis People of Liberty party said that lawmakers should vote for the incumbent prime minister in todays confidence vote. Standard & Poors 500 Index futures also lost 0.4 percent today, while the MSCI Asia Pacific Index fell 0.2 percent. The U.S. government began its first partial shutdown in 17 years yesterday as Republicans and Democrats failed to agree on a compromise budget to keep the federal government open into the new financial year. As many as 800,000 federal employees didnt work and the government closed some services. European Central Bank policy makers meeting in Paris today will keep their benchmark interest rate unchanged at a record low of 0.5 percent, according to all 52 economists in a Bloomberg News survey. The central bank will announce its decision at 1:45 p.m. in Paris and President Mario Draghi will hold a press conference 45 minutes later. The ECB will decide against pumping more cash into the currency zones financial system as long as the threat of action keeps market interest rates under control, according to economists from Berenberg Bank to Nomura Holdings Inc.
Insight: As Ukraine looks west to Europe, Russia’s shadow looms
government’s first partial shutdown in 17 years, and as fears eased of a government collapse in Italy. IBEX 35 — The pan-European FTSEurofirst 300 Index closed provisionally up 0.6 percent at 1,254.36 points, after U.S. lawmakers failed to reach an agreement on the federal budget by the October 1 deadline. This triggered a partial government shutdown that left an estimated 800,000 federal employees facing temporary unpaid leave. economy. That does however mean that we will need to hear the right sounds out of Washington to feel confident enough that the shutdown will not damage economic growth,” Joe Rundle, head of trading at ETX Capital said in a research note. In the U.S., stocks extended their gains on the first trading day of the month and quarter, with all key S&P 500 sectors in positive territory. On the economic front, the U.S. manufacturing sector expanded at its fastest pace in almost 2-1/2 years in September, according to the Institute for Supply Management (ISM). In Europe, the Italian FTSE MIB closed provisionally up 3.1 percent after the previous session’s heavy selling, as investors predicted the government would survive a confidence vote on Wednesday. The manufacturing purchasing manager’s index (PMI) fell to 51.1 in September, down from 51.4 in August. The figure was just above the 50-point mark separating expansion from contraction in the sector.
Europe shares close higher as Italy rallies
And in the back of the minds of all the partnership countries is the 2008 war between Russia and Georgia, when Moscow made very clear its power over a former republic. TYMOSHENKO While Ukraine has not bowed to the threats and uses every opportunity to reiterate its commitment to the European bloc that four of its seven neighbours have already joined, it is not as if closer EU ties are an open-and-shut case. With nearly 46 million people and a $330 billion economy, Ukraine is easily the biggest prize among the eastern partnership states. But Europe cannot afford to compromise on justice and human rights solely to pull one country closer into its orbit, no matter how strategically important it may be. Ukraine has to carry out a range of judicial, electoral and business reforms to secure the association agreement, as well as finding a solution to the case of Yulia Tymoshenko, the former prime minister now imprisoned for abuse of power following a 2011 trial the EU said was based on selective justice. EU officials are satisfied with the progress made on reforms, and expect all of the ‘benchmarks’ to have been met by the Vilnius summit on November 28-29. But Tymoshenko is a much more intractable problem with no clear solution. Germany has said it wants the former prime minister, who is receiving treatment for back problems while under guard in hospital, released or at least allowed to travel abroad for treatment before it can back the association agreement. That position is broadly supported by Britain, France, the Netherlands and the Nordic countries, while several east European member states are more flexible on what the terms of any deal on Tymoshenko should be. For Ukrainian President Viktor Yanukovich it is a deeply emotive issue. There is an ingrained animosity between him and his former political rival and a fear, analysts say, of retaliation by her against him if she is set free.