Shares dip as investors await Black Friday updates

LONDON: Global stocks fell modestly yesterday as investors awaited the full return of Wall Street traders to their desks following the Thanksgiving break. Early indications over the success of Black Friday were set to drive trading at the start of a busy week on the economic data front.

In Europe, France’s CAC 40 was down 0.3 percent at 5,375 while Germany’s DAX fell 0.2 percent to 13,038. Britain’s FTSE 100 was 0.1 percent lower at 7,402. US stocks were poised for a flat opening with Dow futures and the broader S&P 500 futures unchanged.

In muted trading on Friday, US stocks set more records following the Thanksgiving Day break, with technology companies leading the way. The focus in the early part of this week is likely to be on Black Friday sales updates. Macy’s has already said sales on one of the busiest shopping days of the year were going well.

“A strong showing for online retailers on Black Friday may have boosted sentiment, with Cyber Monday having the potential to be even better in a sign that the consumer is healthier than other numbers this year have indicated,” said Craig Erlam, senior market analyst at OANDA.

The House has passed a 10-year, $1.4 trillion tax cut that blends a sharp reduction in business tax rates with more modest relief for individuals. The Senate expects to vote on its version this week. Republicans can pass the measure without Democratic votes.

It’s a busy week on the data front, with a raft of manufacturing figures due at the end of the week. There’s also inflation figures for the eurozone as well as comments from outgoing Federal Reserve chair Janet Yellen to digest.

European stocks rose yesterday on hopes that German Chancellor Angela Merkel is close to forming a government, dealers said. London equities gained 0.3 percent on Cyber yesterday that has become increasingly popular in Britain over recent years. Frankfurt and Paris meanwhile each added 0.2 percent in value, setting aside earlier lows on the Shanghai stock market.

“A groggy start has given way to some decent growth this Monday, with European investors seemingly ignoring China’s threemonth lows to focus on the political progress in Germany,” said Spreadex analyst Connor Campbell. A renewed coalition between Merkel’s CDU/CSU conservatives and the center-left Social Democrats is “the best option for Germany”, CSU head Horst Seehofer said Sunday, raising hopes for an end to the political impasse.

Merkel has been scrambling to avert snap elections after talks to form a new government with the pro-business Free Democrats (FDP) and the left-leaning Greens broke down a week ago.

The Social Democrats had vowed to go into opposition after a disappointing showing in the September general election, but in a U-turn on Friday SPD chief Martin Schulz said he was ready for talks with Merkel’s bloc. “Political optimism is picking up in Germany,” added analyst David Madden at CMC Markets.

“The Germany economy has been managing just fine without a functioning government for the past two months, but investors would welcome some political stability.”

Back in London, retail shares experienced mixed fortunes despite hopes of a fresh sales boost from yesterday’s online price cuts. Clothing-to-food retailer Marks and Spencer won 1.0 percent to 300.80 pence but supermarket giant Tesco was down 0.2 percent at 192.20 pence.

The Shanghai Composite Index fell 0.9 percent to 3,322.23 and Tokyo’s Nikkei 225 lost 0.2 percent to 22,495.99. Seoul’s Kospi plunged 1.4 percent to 2,507.81 and Hong Kong’s Hang Seng shed 0.6 percent to 29,691.01. India’s Sensex lost 0.2 percent to 33,604.68 and Sydney’s S&P-ASX 200 edged up 0.1 percent to 5,988.80. New Zealand gained while benchmarks in Taiwan and Southeast Asia retreated.

Benchmark US crude fell 62 cents to $58.33 per barrel in electronic trading on the New York Mercantile Exchange while Brent crude, used to price international oils, fell 37 cents to $63.10 in London.

Asian markets fell yesterday on profittaking after last week’s volatility. The region’s investors ignored another strong lead from Wall Street, where the S&P 500 and Nasdaq chalked up fresh records on expectations of strong sales on Black Friday and Cyber yesterday-two major postThanksgiving shopping days. Shanghai slipped almost one percent, with dealers still on edge after Thursday’s sharp losses fuelled by concerns about a crackdown on speculative trading. —Agencies