Saturday July 13, 2024

European stock markets deviate as rally dwindles

Oil prices have increased as crude-rich Gabon faced a military coup

By Web Desk
August 30, 2023
A screeN displays CAC stock points at the headquarters of Pan-European stock exchange. — AFP
A screeN displays CAC stock points at the headquarters of Pan-European stock exchange. — AFP

The stock markets in Europe have diverged following a global stock rally decrease on Wednesday, concerning businesses over unvaried highs and lows in accordance with stock prices.

Approaching the halfway mark, London rose while Frankfurt and Paris fell. Tokyo closed higher but Shanghai and Hong Kong flattened. Oil prices climbed as crude-rich Gabon faced a military coup.

Global equities rallied Tuesday after a softer-than-expected report on US job openings soothed fears the Federal Reserve would again hike interest rates.

That weighed on the dollar Wednesday against the euro and pound.

"Signs of America´s cooling economy have raised hopes that the pause button will be pushed on punishing interest rate hikes," noted Susannah Streeter, head of money and markets at Hargreaves Lansdown.

Focus was also on China after a report said its biggest state-backed banks would slash rates on mortgages and deposits as part of a drive to support the country´s beleaguered property sector.

Wall Street enjoyed one of its best days in months on Tuesday as Amazon and Apple shares rallied.

This was after the Labor Department´s closely followed Job Openings and Labor Turnover Summary (JOLTS) figure fell well short of forecasts.

A separate report revealed consumer confidence falling owing to concerns about jobs, higher rates and lingering inflation.

The readings come before this week´s release of the Fed´s preferred gauge of inflation — the personal consumption expenditures price index — as well as data on non-farm payrolls and factory activity.

Analysts said the Jolts reading would give monetary policymakers room to hold off on lifting borrowing costs further, having already pushed them to a two-decade high to tame prices.

The cooling of rate expectations helped bring US Treasury yields down and even allowed investors to bring forward bets on a rate cut to June from July, according to Bloomberg.

"With layoffs estimated to be 8.8 million, it is still around 70 per cent above its long-term average, but markets don´t care about that," said Matthew Simpson at City Index.

"It´s the rate of change that matters. And with job openings falling to a 28-month low, it suggests the labour market is indeed softening."

Key stock figures 

London - FTSE 100: UP 0.3 per cent at 7,483.61 points

Frankfurt - DAX: DOWN 0.4 per cent at 15,871.15

Paris - CAC 40: DOWN 0.4 per cent at 7,343.33

EURO STOXX 50: DOWN 0.4 per cent at 4,307.23

Tokyo - Nikkei 225: UP 0.3 per cent at 32,333.46 (close)

Hong Kong - Hang Seng Index: FLAT at 18,482.86 (close)

Shanghai - Composite: FLAT at 3,137.14 (close)

New York - Dow: UP 0.9 per cent at 34,852.67 (close)

Euro/dollar: UP at $1.0893 from $1.0884 on Tuesday

Pound/dollar: UP at $1.2665 from $1.2644

Dollar/yen: UP at 146.34 yen from 145.87 yen

Euro/pound: DOWN at 85.98 pence from 86.05 pence

Brent North Sea crude: UP 0.6 per cent at $85.99 per barrel

West Texas Intermediate: UP 0.7 per cent at $81.73 per barrel