Global stock markets falter before weekend
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