Stocks in Asia and Europe collapse, US surges at start of fourth quarter trading
NEW YORK – Global stock markets started the fourth quarter with mixed results on Friday, as Wall Street recovered from recent losses, but Asia and Europe made little progress.
A range of concerns have loomed over global stocks recently, including supply chain grunts, inflation, the Delta variant of Covid-19 and its effects on the economic recovery and, more recently, the political deadlock. in the United States which brings it closer to a potential debt default.
Wall Street posted strong gains on the first trading day of October, which observers saw as a positive reaction to news that pharmaceutical giant Merck would seek clearance in the United States for an oral drug against Covid- 19 which has worked well in clinical trials.
“I think it’s something a lot of people and not just investors want, it’s a cure for Covid,” said Kim Forrest at Bokeh Capital Partners.
European markets had a rough day, with London’s FTSE 100 and Frankfurt DAX both ending the session in the red, while the Paris CAC 40 ended more or less flat. Asian markets suffered larger losses earlier today.
“Markets are expected to remain volatile as (the fourth quarter) begins, with October another historically turbulent period following September’s mad rush for the markets which saw the S&P 500 take a seven-month winning streak,” said Charles Schwab analysts.
There was indeed cause for concern. The US Department of Commerce’s personal consumption expenditure price index rose 4.3% from August 2020 as the world’s largest economy grapples with supply chain delays and shortages amid its rebound after pandemic business closures.
Congressional lawmakers on Thursday night approved a measure to prevent a U.S. government from shutting down, but now have just weeks to lift the debt ceiling and avoid default or face economic calamity .
“The news from Washington has not been so encouraging,” said Patrick O’Hare, analyst at Briefing.com.
– Inflation deflates sentiment –
In Europe, too, investors were worried about skyrocketing inflation.
Eurozone consumer prices jumped 3.4% on an annualized basis in September – the fastest pace since 2008 – as energy costs soared.
Most of the world’s central banks insist the current spike in inflation is temporary, but investors are still concerned that tightening monetary policy will further harm any post-Covid recovery.
The inflation news “probably didn’t help general sentiment,” Interactive Investor analyst Richard Hunter told AFP.
“Having said that, the European Central Bank takes up the same song as the other major central banks, assuming the high level of inflation is transient.”
“Time will tell” whether the ECB needs “timely tightening measures,” he said.
Investors are bracing for the Federal Reserve to start scaling back its massive bond buying program before the end of the year.
A rise in government bond yields in the US and Europe pissed off investors at the start of the week.
All three of Wall Street’s major indices ended in the red on Thursday, which was also the last session of the third quarter. The Dow and Nasdaq were down for the quarter overall, while the S&P 500 posted a small gain.
In Asia, Tokyo lost 2.3% on Friday.
Sydney lost 2% despite news that Australia will start reopening its borders in November after 18 months of restrictions.
The markets in Hong Kong and mainland China have been closed for a holiday.
Key figures around 2025 GMT
New York – Dow: up 1.4% to 34,326.46 (close)
New York – S&P 500: UP 1.2% at 4,357.04 (close)
New York – Nasdaq: Up 0.8% to 14,566.70 (close)
London – FTSE 100: DOWN 0.8% to 7,027.07 (close)
Frankfurt – DAX: DOWN 0.7% to 15,156.44 (closing)
Paris – CAC 40: DOWN 0.04% to 6,517.69 (closing)
EURO STOXX 50: DOWN 0.3% to 4,035.30 (closing)
Tokyo – Nikkei 225: DOWN 2.3% at 06:15 GMT (closing)
Hong Kong – Index Hang Seng: Closed for a public holiday
Shanghai – Composite: Closed for a public holiday
Euro / dollar: Up to $ 1.1594 from $ 1.1580 at 9:00 p.m. GMT Thursday
Pound / dollar: At $ 1.3548 vs. $ 1.3474
Euro / pound: DROP to 85.57 pence against 85.95 pence
Dollar / yen: LOWER to 111.02 yen against 111.29 yen
North Sea Brent: Up 1.1% to $ 79.17 per barrel
West Texas Intermediate: Up 1.0% to $ 75.74
France Media Agency
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