European shares drift lower as traders take a breather

European shares drifted lower Monday as investors paused for breath following a sizeable rally last week. Despite the move lower, there are few signs of the turmoil that gripped stock markets earlier this month.

Benchmark U.S. crude price rises 57 cents to $62.25 US per barrel

A man looks at an electronic stock indicator of a securities firm in Tokyo on Monday. Asian markets were higher on Monday following Wall Street gains last week, as investors' jitters showed signs of easing. Many major markets were closed on holidays. (Shizuo Kambayashi/Associated Press)

European shares drifted lower Monday as investors paused for breath following a sizeable rally last week. Despite the move lower, there are few signs of the turmoil that gripped stock markets earlier this month. 

In London, the FTSE 100 closed at 7,247.66 points, down 47.04 points or 0.64 per cent on the day. The CAC 40 index in Paris was down 25.4 points at 5,256/18 and Germany's DAX index slipped 66.36 points to 12,385.60.

The Toronto stock market was closed for a provincial holiday while the major U.S. stock markets were closed for Presidents Day.

On international money markets, the Canadian dollar was at 79.61 cents US, down by 0.06 of a cent. On Friday, its average trading value was 79.74 cents US.

Earlier this month there were real concerns that global stock markets were poised for a sustained period of weakness. However, sentiment has recovered over the past week or so, with many traders adjusting to the altered economic environment.

 "So far, global equity markets seem to be adjusting to the prospect of higher inflation, presumably on the basis that increases in corporate pricing power will be positive for earnings rather than of the cost-push kind that dents profit margins and result in a stagflationary economy," said Neil MacKinnon, global macro strategist at VTB Capital.

Earlier, Asian stocks performed strongly as they caught up with Friday's further advance, particularly on Wall Street. Japan's Nikkei 225 jumped 2 per cent to 22,149.21. The Tokyo benchmark ended the day just 2.7 per cent below where it started 2018, having recouped most of its losses during the recent global rout. South Korea's Kospi advanced 0.9 per cent to 2,442.82. Australia's S&P/ASX 200 rose 0.6 per cent to 5,941.60. Chinese markets were closed for Lunar New Year.

Benchmark U.S. crude rose 82 cents to $62.503 US per barrel in electronic trading on the New York Mercantile Exchange while Brent crude, used to price international oils, was up 62 cents at $65.46 US a barrel in London. March natural gas was at $2.58 US per mmbtu, up 2.4 cents, April bullion was at $1,350.30 US per ounce, down $5.19, and March copper was at $3.20 per pound, down five cents.

with files from The Canadian Press