Fears of tighter mon­e­tary poli­cies weigh on global stocks

The Sun (Malaysia) - - SUNBIZ -

LON­DON: Ex­pec­ta­tions of tighter mon­e­tary poli­cies on both sides of the At­lantic weighed on global stock mar­kets yes­ter­day amid talk that the Euro­pean Cen­tral Bank (ECB) plans to cut back its vast stim­u­lus drive.

Mount­ing ev­i­dence that the US Fed­eral Re­serve is gear­ing up for an early rise in key in­ter­est rates also damp­ened sen­ti­ment, but Wall Street stocks held up, lifted by ris­ing oil prices.

Both Frank­furt and Paris eq­ui­ties fell by 0.7% in value around mid­day, while Lon­don dropped 0.5%.

Eu­ro­zone bond prices also fell, re­flect­ing ex­pec­ta­tions of fewer ECB bond pur­chases.

The ECB re­but­ted a re­port of an “in­for­mal con­sen­sus” among its pol­i­cy­mak­ers that its quan­ti­ta­tive eas­ing bond-buy­ing stim­u­lus pro­gramme should be grad­u­ally scaled back in steps of 10 bil­lion (RM46.5 bil­lion).

On the cur­rency front, Bri­tain’s pound stead­ied af­ter hit­ting a 31year low of US$1.2686 early yes­ter­day be­fore re­cov­er­ing to US$1.2758, 0.2% higher on the day. It fell as much as 0.5% to 88.43 pence per euro be­fore also claw­ing its way back into pos­i­tive ter­ri­tory.

Ear­lier in Asia, Tokyo stocks rose as the weaker yen boosted ex­porters. Hong Kong was buoyed by re­cent up­beat China data and the im­pend­ing open­ing of a link-up with the Shen­zhen stock ex­change that could see fresh funds flood in.

How­ever, most other Asian mar­kets strug­gled.

Oil prices mean­while con­tin­ued re­bound­ing and re­ceived a ex­tra boost from US data show­ing a sur­prise de­cline in stock­piles.

Brent crude was up US$1.13, or 2.2%, at US$52 (RM215) a bar­rel by 1458 GMT, peak­ing at US$52.09, its high­est since June 10.

US West Texas In­ter­me­di­ate crude was up US$1.20, or 2.4%, at US$49.89. It ear­lier hit US$49.95, a high since June 29.

The US En­ergy In­for­ma­tion Ad­min­is­tra­tion said crude stock­piles fell nearly 3 mil­lion bar­rels for the week to Sept 30. – Agen­cies

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