European shares open higher
On Thursday European shares opened higher, though investors were still cautious after Asian equities fell for a fourth consecutive day, and as attention turns to crucial U.S. data expected later in the session.
Hong Kong’s Hang Seng index headed the declines in Asia, falling to its lowest level so far this year, and Chinese shares dropped as investors discarded property and consumer stocks over concerns that the cash flow crisis at China’s Evergrande Group could affect the wider economy.
The group’s main unit, Hengda Real Estate Group Co Ltd, applied to suspend trading of its onshore corporate bonds after being downgraded.
Global stock markets have strived to make gains so far this week, harmed by concerns about the global economic rebound. Unexpectedly weak data from China on Wednesday strengthened investor believes that global growth is slowing due to COVID19 and supply chain limitations.
The MSCI world equity index has lost around 1.7% since it reached an all-time high on the 7 September. At 0722 GMT on Thursday it had lost less than 0.1%. Europe’s STOXX 600 gained 0.7% on the day, having fallen 0.8% the previous day.
Investors are closely watching inflation data but the global picture is mixed: U.S. data on Tuesday showed inflation decreasing and having possibly hit the highest point, but inflation in Britain was the highest in years, according to data issued on Wednesday.
Major banks advised clients to decrease their exposure to stocks, with many market participants expecting the equity bull run to end. UBS’s Ganesh also said that regulatory risks to Chinese stocks are not over.
Jobs data showed that Australian employment plunged in August as coronavirus lockdowns in Sydney and Melbourne forced businesses to sack workers and reduce hours.
Oil prices were negative, trimming some of the large gains made in the previous session after a larger-than-expected fall in crude oil stocks in the United States.
This article was compiled by BOV Asset Management Limited, a member of the BOV Group. BOV Asset Management,TG Complex, Suite 2, Level 3, Brewery Str., Mriehel BKR 3000. Email: infoassetmanagement@bov.com Internet address: www.bovassetmanagement.com. BOV Asset Management is licensed by the MFSA.