Eu­ro­pean stock mar­kets slip as in­vestors take a breather

Gulf Times Business - - BUSINESS -

Stock mar­kets in Europe and the US slipped yes­ter­day after sev­eral days of gains as in­vestors took a breather in the ab­sence of fresh news on trade talks be­tween Bei­jing and Wash­ing­ton.

Ear­lier, Asian mar­kets ended the week mostly on a higher note.

Key Eu­ro­pean mar­kets were up to half a per cent lower at the close, while Wall Street was down around 0.3% ap­proach­ing mid­day in New York.

In Europe, Lon­don’s FTSE 100 was down 0.4% to 6,918.18 points,

Frank­furt’s DAX 30 lost 0.3% to 10,887.46 and Paris’s CAC 40 was down 0.5% to 4,781.34 points at the close yes­ter­day.

“US stocks are lower for the first day this week, par­ing a third-con­sec­u­tive weekly ad­vance that has come from lin­ger­ing trade op­ti­mism and cooled con­cerns re­gard­ing the Fed mak­ing a pol­icy mis­take,” said an­a­lysts at Charles Sch­wab.

“Eq­ui­ties are slip­ping amid likely cau­tion ahead of the ramp up of earn­ings sea­son that co­in­cided with the Q4 mar­ket tu­mult,” they said.

But an­a­lysts also said that the first full trad­ing week of 2019 showed a solid per­for­mance after a tu­mul­tuous month of De­cem­ber for eq­ui­ties.

“De­spite a lack­lus­tre end to the week, 2019 has man­aged to get off to a de­cent start de­spite eq­uity mar­kets fin­ish­ing 2018 very much on the back foot,” said Michael Hew­son, chief mar­ket an­a­lyst at CMC mar­kets UK.

This week in­vestors have been rid­ing a wave of op­ti­mism on signs that China and the United States could even­tu­ally reach a trade deal – but there has been no con­crete news yet, al­though both sides in­di­cated that talks had been pro­duc­tive.

“Traders have yet to hear any fur- ther de­tails about the US-China trade talks,” said CMC mar­kets UK an­a­lyst David Mad­den, say­ing in the mean­time mar­kets “ap­pear to be tak­ing a breather”.

Sen­ti­ment was also boosted this week after Fed­eral Reserve chief Jerome Pow­ell in­di­cated the US cen­tral bank will likely slow the pace of in­ter­est rate hikes.

Fed min­utes on Wed­nes­day showed pol­i­cy­mak­ers are happy to hold off any more rate hikes as they as­sess the state of the econ­omy, back­ing up dovish com­ments last week by Pow­ell.

There was a slight wob­ble in New York after Pow­ell on Thurs­day sug­gested the cen­tral bank’s se­cu­ri­ties hold­ings should be “sub­stan­tially smaller” – a sell-off by the Fed of such as­sets would likely lift money mar­ket rates.

But the gen­eral mood re­mained up­beat as a num­ber of other top Fed of­fi­cials in­di­cated they were happy to see a break in hikes.

Traders at the Frank­furt Stock Ex­change. The DAX 30 lost 0.3% to 10,887.46 points yes­ter­day.

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