World’s stock mar­kets bid re­bound from rout

Gulf Times Business - - BUSINESS -

Global stock mar­kets at­tempted to re­bound yes­ter­day, one day af­ter fe­ro­cious losses sparked by height­ened eco­nomic con­cerns, no­tably over ris­ing US in­ter­est rates that have drawn at­tacks from Pres­i­dent Don­ald Trump on his “crazy” cen­tral bank.

Wall Street stocks snapped higher at the open­ing bell, try­ing to re­cover from a two-day 1,300-point blood­bath that left it the low­est lev­els in months.

In late morn­ing trad­ing, the Dow was up 0.9%.

The broader S&P 500 climbed 1.2% and the tech-heavy Nas­daq Com­pos­ite pushed 1.9% higher.

Asia en­joyed healthy gains, with star per­former Hong Kong surg­ing 2.1%, Shang­hai up 0.9% and Tokyo adding 0.5%, at the end of a trau­matic week for in­vestors world­wide.

Europe ini­tially chased Asia higher, but gave up gains as the clos­ing bell ap­proached.

Lon­don and Paris ended the day down 0.2% at 6,995.91 points and 5,095.98 points re­spec­tively, while Frank­furt gave up 0.1% at 11,523.81 points. The EURO STOXX 50 closed 0.5% down at 3,194.85 points.

The dollar re­cov­ered ver­sus the euro and pound, while oil fu­tures bounced back.

“US stocks are re­cov­er­ing solidly in early ac­tion from the past two ses­sions of drops that have come from the fes­ter­ing con­cerns re­gard­ing the pace of the re­cent rally in Trea­sury yields that spilled over to the global mar­kets,” said an­a­lysts at Charles Schwab bro­ker­age.

Still the re­bound was only par­tial, as the Dow was down 5% for the week af­ter trad­ing closed on Thurs­day.

“The bru­tal sell­off that en­gulfed global stocks this week took a pause on Fri­day as risk sen­ti­ment slightly im­proved across fi­nan­cial mar­kets,” noted an­a­lyst Luk­man Otunuga at trad­ing firm FXTM.

In the event US banks Cit­i­group, JP Mor­gan and Wells Fargo re­ported higher third-quar­ter earn­ings yes­ter­day, re­flect­ing the ben­e­fits of higher in­ter­est rates for the fi­nan­cial sec­tor.

Shares in Cit­i­group and Wells Fargo both rose, while those in JP Mor­gan slid in morn­ing trad­ing.

Yes­ter­day’s fight­back fol­lowed two days that have seen some­thing ap­proach­ing panic in global eq­uity mar­kets, as in­vestors took fright in the face of ris­ing US in­ter­est rates and an in­ten­si­fy­ing trade war be­tween Wash­ing­ton and Bei­jing.

The global sell-off was also due in part to Trump de­scrib­ing the poli­cies of the US Fed­eral Re­serve as “loco” and “crazy”, spark­ing con­cerns over the in­de­pen­dence of the world’s top cen­tral bank.

But US Trea­sury Sec­re­tary Steven Mnuchin yes­ter­day down­played the stocks plunge in Wall Street, say­ing it was “just a nat­u­ral cor­rec­tion”, in an in­ter­view on CNBC.

Sep­a­rately yes­ter­day, oil prices re­bounded from sharp losses a day ear­lier — but gains were tem­pered af­ter the In­ter­na­tional En­ergy Agency watch­dog trimmed its global crude de­mand growth fore­casts for 2018 and 2019.

Vis­i­tors walk past an il­lu­mi­nated ro­tat­ing cube dis­play­ing share price in­for­ma­tion in the main atrium of the Lon­don Stock Ex­change Group of­fices in Pater­nos­ter Square. Lon­don and Paris ended down 0.2% at 6,995.91 points and 5,095.98 points re­spec­tively yes­ter­day.

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