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London steadies as Yellen sticks to Fed plan

London Stock ExchangeWed close: Global markets picked up after Federal Reserve chairman Janet Yellen said that conditions in the United States would allow the central bank to proceed with “gradual” adjustments to policy.

The Dow Jones slipped, but the S&P 500 rose 7.81 points, or 0.42%, to 1,860.02 and the Nasdaq Composite leapt 45.21 points, or 1.06%, to 4,313.97.

Twitter shares fell 12% in New York in after-hours trading after it published results showing a decline in monthly active usage in the last quarter.

Revenues were up 58% year-on-year to $2.2bn (£1.5bn), but investors were drawn to the tail-off in users of the site.

Twitter reported it had 320 million users in the December quarter, flat with the previous quarter and still up 9% year over year. Analysts expected Twitter to report 325 million users.

It is popular with media outlets, politicians and celebrities but many people say they do not understand how or why they should use it.

There was better news on advertising. It generated $710 million in revenue, an increase of 48% year-over-year, in line with analyst estimates.

Oil prices steadied as Iran’s oil minister said Tehran was ready to negotiate with Saudi Arabia, hinting at a coordinated approach to tackling the supply glut.

Brent crude was up $0.39 at $30.71 a barrel. US crude was down $0.41 at $27.53.

London shares picked up and closed up at 40 points at 5,672 despite the Nikkei in Japan taking a nosedive for a second day.

Shares in Tokyo plunged more than 5% on Tuesday and were down 4% again today with falling bank shares and a stronger yen continuing to take a toll on sentiment.

The Bank of Japan’s decision to impose negative interest rates on 29 January has been followed by a 10% fall in the index.

China, Hong Kong and South Korea, among others, remained closed for the Lunar New Year holiday.

In Europe, concern over the banks eased today after yesterday’s joint statement from a German government minister and Deutsche Bank in an attempt to bring some calm to nervous trading rooms.

John Cryan, chief executive at Deutsche Bank, said his bank was “rock solid” after the German lender’s share price fell by 4.27%, marking a 46% decline since the start of 2016 and a 58% slump in the past six months. Wolfgang Schaeuble, Germany’s finance minister, said: “I have no concerns about Deutsche Bank.”

Some analysts are arguing that the world economy is in better shape than the markets are suggesting. There was also an uplift in oil prices. This morning West Texas Intermediate was trading 2.25% higher at $28.57 a barrel, while Brent was up 2.41% at $31.05.

 

 

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