Economic data positive as India cuts rates

Economic data on Tuesday were mostly positive.

China's foreign direct investment rose 6.3 percent in February from a year earlier, its first gain in nine months.

In the US, housing starts rose 0.8 percent in February. Building permits rose 4.6 percent to the highest level since June 2008.

In contrast, eurozone construction output fell 1.4 percent in January.

The good news for Europe, though, was that the ZEW index of German investor confidence rose to 48.5 in March, the highest level since April 2010, from 48.2 in February.

However, confidence in the euro area as a whole is being shaken after lawmakers in Cyprus overwhelmingly rejected a proposed levy on bank deposits as a condition for a European bailout on Tuesday.

Meanwhile, elsewhere in Europe, UK inflation rose to a nine-month high of 2.8 percent in February, but economists still see more monetary stimulus as likely.

“What does it mean for the Bank of England? Not a lot. I don't think high inflation will act as a deterrent to their desire to do something else if they want to,” said Peter Dixon, an economist at Commerzbank.

However, it was the Reserve Bank of India that announced a cut to its benchmark repo rate by 25 basis points to 7.50 percent on Tuesday, its second reduction this year.