European equities rise, Asia in turmoil over Samsung
European stock markets held firm yesterday as traders digested last week’s volatile performance and eyed rising eurozone investor sentiment, dealers said. London added 0.2 percent in value, as investors paused for breath after sterling’s Brexit-fuelled “flash crash” to 31-year dollar lows late last week. The weak pound lifts exporters. Frankfurt won 0.6 percent despite ongoing concerns over troubled Deutsche Bank, and Paris added 0.4 percent.
Asian investors also trod warily in holidaythinned trade and the dollar climbed after last week’s drop on below-par US jobs data, while Samsung Electronics was hit by a renewed crisis over its recalled Galaxy Note 7 smartphone. “It’s been a slow start to the trading week, as a lack of news flow in Europe and Asia, combined with bank holidays in Japan, Canada and the US, hit trading volumes and switch attentions to big events later in the week,” said Oanda analyst Craig Erlam.
“As for today, focus will likely remain on some of the big moves that we saw last week-including the flash crash and sharp depreciation in the pound, dollar gains, the corresponding drop in gold and the four-month highs in oil. “While moves so far today have been more tame, as we’ve seen so often in the past, the US open can spark markets back to life.”
Trading on Wall Street is expected to be light due to the Columbus Day government holiday. The pound was lodged close to 31-year dollar lows after a so-called flash crash in Asia on Friday saw it collapse, with investors on edge over Britain’s plans to leave the European Union.
Britain’s finance minister Philip Hammond downplayed the pound’s flash crash, blaming technical factors, but Bank of England Governor Mark Carney asked the Bank for International Settlements to investigate. US stocks showed modest losses after a key September jobs report revealed 156,000 positions added, which was fewer than market expectations for between 170,000-180,000.
Analysts said the figures were unlikely to pre- vent the Federal Reserve raising interest rates by year’s end.
Samsung in fresh turmoil
Asian investors trod warily in holidaythinned trade yesterday and the dollar climbed after last week’s drop on below-par US jobs data, while Samsung Electronics was hit by a renewed crisis over its troubled Galaxy Note 7. The labour department said Friday that fewer jobs than expected were created in the world’s top economy in September. The news left all three main indexes on Wall Street in negative territory and sent the dollar lower against the yen Friday.
Seoul ended up 0.2 percent but Samsung Electronics was battered by reports that it had suspended production of its flagship Galaxy Note 7 handset after distributors stopped offering replacements because of continued safety concerns. US telecoms firm AT&T and German rival T-Mobile said they had stopped exchanges of the Note 7 pending probes into reports of some replacement handsets catching fire.
Samsung announced a global recall of 2.5 million handsets last month after complaints that some had exploded owing to a battery problem. Shares fell four percent in morning trade before recovering in the afternoon to end down 1.5 percent. Markets in Tokyo, Hong Kong and Taipei were closed for public holidays.
However, analysts said the figures were unlikely to prevent the Federal Reserve raising interest rates by year’s end. In afternoon trade yesterday, the dollar was at 103.10 yen from 102.93 yen in New York but well down from the 103.87 yen earlier Friday in Asia.
The pound was stuck at 31-year lows against the dollar after a flash crash in Asia Friday saw it plunge, with investors on edge over Britain’s plans to leave the European Union.
Analysts said it was unclear if sterling’s sudden plunge was down to a computer generated sell-off or other reasons but Brexit was at the root of it. China set the yuan’s central parity rate weaker than 6.7 to the dollar for the first time in six years Monday, the first day of trading after it joined the IMF’s “special drawing rights” reserve currency basket.
The currency has been declining for months in the face of a stronger dollar, slowing growth at home and capital outflows.
Trump in crisis
In share trading, Shanghai, which was closed last week for a national holiday, ended up 1.5 percent, while Sydney closed 0.2 percent higher. However, Singapore and Wellington eased, while Bangkok tumbled three percent after officials said King Bhumibol Adulyadej’s health was “not stable” in an update that raised fears for the 88year-old.
There are fears his demise could lead to economic instability, especially as there is no official discussion on how the country will handle his passing. Tokyo, Hong Kong and Taipei were closed for public holidays. —Agencies