European equities waver on eve of ECB meeting

European shares wavered Wednesday after losses in Asia, as investors remained cautious on the eve of a highly anticipated policy meeting at the European Central Bank. London's FTSE 100 index fell 0.20 percent to 5,660.37 points in afternoon deals, while Frankfurt's DAX 30 gained 0.58 percent to 6,972.89 points and Paris' CAC 40 rose 0.31 percent to 3,409.73 points. Madrid added 0.41 percent and Milan edged up 0.13 percent. US stocks also wobbled in opening trade Wednesday amid hopes that increasingly weak global economic data will spur central banks into action. The Dow Jones Industrial Average was up 0.13 percent in the first five minutes of trade, the S&P 500-stock index edged up 0.03 percent, while the tech-rich Nasdaq fell 0.10 percent. In foreign exchange activity, the euro shot up to $1.2605, compared with $1.2564 late in New York on Tuesday on prospects the ECB would soon intervene on the bond markets. Asian markets retreated on Wednesday after a third straight monthly contraction in US manufacturing activity, which followed recent poor numbers on factory activity from Asia and Europe. Dealers meanwhile looked ahead to Thursday's European Central Bank meeting, with all eyes on president Mario Draghi for new measures to fight the stubborn debt crisis. Market movement came "as persistent global economic growth concerns are being met with optimism that the European Central Bank is about to embark on the resumption of its bond purchase programme," Charles Schwab & Co. analysts said. Dealers have been broadly upbeat since Draghi in July hinted at a restart of its sovereign bond-buying programme to help under-pressure eurozone nations suffering high borrowing costs. And expectations were stoked on Monday after European lawmakers said Draghi had told them that buying government bonds of up to three-year maturity on the secondary market did not amount to bailing out spendthrift euro members. Such a move in the past was justified to help stabilise and protect the 17-nation eurozone, he said, according to the politicians. "There have been a number of stories circulating that Mario Draghi will announce a bond-buying programme which will target the debt of troubled countries with maturities of three years and below," said analyst David Morrison at trading group GFT. "The ECB president has said that this would be allowable under EU law and consistent with the ECB's price stability mandate. "However, even if he can launch such a programme in the face of opposition from the Bundesbank and others, many investors doubt that it will be enough to calm markets for long," Morrison added. In Asian stock market deals, Hong Kong closed down 1.47 percent, Tokyo sank 1.09 percent and Seoul slipped 1.74 percent, while Shanghai was off 0.29 percent. Sydney closed 0.57 percent lower after figures showed the Australian economy grew slower than expected in April-June.