Global stock mar­kets fal­ter be­fore week­end

Kuwait Times - - BUSINESS -

LON­DON: The global stocks rally fal­tered yes­ter­day with Euro­pean eq­ui­ties stum­bling as some in­vestors took prof­its and eyed overnight US losses. “We’re see­ing some profit tak­ing,” said an­a­lyst Craig Er­lam at traders Oanda. “They’ve been on a good run since Oc­to­ber and it’s per­fectly rea­son­able that traders will ... lock in some prof­its,” he said. The start of this week was over­shad­owed by last Fri­day’s deadly Paris at­tacks, which raised fears about se­cu­rity in Europe and its ef­fect on the econ­omy. Mar­kets then bounced higher af­ter the US Fed­eral Re­serve on Wed­nes­day flagged a likely De­cem­ber in­ter­est rate hike amid the bright­en­ing eco­nomic out­look.

Min­utes show­ing Fed pol­i­cy­mak­ers are con­fi­dent the US econ­omy is strong enough to with­stand a De­cem­ber hike had fu­elled buy­ing across global mar­kets and sent the dol­lar climb­ing. Head­ing into the week­end yes­ter­day, many in­vestors paused for breath. Asian stocks tacked higher in a choppy ses­sion af­ter Wall Street had fin­ished in neg­a­tive ter­ri­tory on Thurs­day.

“Europe had a lack­lus­tre lead from the US and Asia ... and a lack of other pos­i­tive cat­a­lysts leaves traders with­out the in­cen­tive to get back on board,” Er­lam added.

By 1130 GMT, Frank­furt’s DAX 30 stocks in­dex rose 0.1 per­cent, but the Paris CAC 40 nudged 0.2 per­cent lower com­pared with Thurs­day’s close. Out­side the eu­ro­zone, Lon­don’s bench­mark FTSE 100 in­dex added a mar­ginal 0.03 per­cent in value.

In for­eign ex­change, the euro dipped against the dol­lar, as traders di­gested fresh com­ments from Euro­pean Cen­tral Bank chief Mario Draghi. Draghi, speak­ing in Frank­furt, de­clared that the bank will “do what we must” to lift in­fla­tion as quickly as pos­si­ble, in a new sign it could boost its anti-de­fla­tion de­fenses. He also warned that in­fla­tion was stub­bornly way be­low the tar­get of close to 2 per­cent even though the bank has de­ployed a 1.1-tril­lion-euro ($1.2-tril­lion) stim­u­lus scheme to help lift con­sumer prices.

The quan­ti­ta­tive eas­ing pro­gram to buy sov­er­eign bonds at a rate of 60 bil­lion eu­ros a month runs un­til at least Septem­ber 2016, but in­fla­tion came in at zero in Oc­to­ber. “The head of the ECB ap­pears de­ter­mined to fight the dis­in­fla­tion­ary en­vi­ron­ment,” noted Lon­don Cap­i­tal Group an­a­lyst Brenda Kelly. “A lower euro against both the dol­lar and the pound has been the re­sult but any up­side ef­fects on euro-zone (stocks) in­dices has thus far been elu­sive.”— Reuters

NEW YORK: Traders gather at the post of spe­cial­ist John McNier­ney, back­ground cen­ter, at the end of the trad­ing day, on the floor of the New York Stock Ex­change. Stocks slipped yes­ter­day as traders were dis­ap­pointed by sev­eral cor­po­rate earn­ings and out­looks. —AP

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