Global equity markets mostly fell Thursday and the pound retreated once more
against the dollar on lingering recession fears despite hopes that the US
Federal Reserve will tame the pace of aggressive interest rate hikes.
اضافة اعلان
Oil prices held steady, failing to build on gains after
OPEC and other major
producers led by Russia decided to slash output by two million barrels per day.
OANDA market analyst Craig Erlam said markets erased early gains as
"investors take a cautious approach" ahead of Friday's release of a
US jobs report that could influence the Fed's next move.
Wall Street stocks dipped at the start of trading with the Dow shedding 0.4
percent while European markets were down in afternoon deals.
Stocks had snapped higher at the start of this week as disappointing US
economic data fuelled hopes that the Federal Reserve may let up in its campaign
of aggressive interest rate hikes to get soaring inflation under control.
"The narrative in recent days of weaker data being positive as it could
be a precursor to slower tightening didn't seem sustainable and it's already
proving to be the case," added Erlam.
Instead, he said he believed the rally to be a response to the sharp drop in
shares in the previous weeks as the Fed made clear it would keep raising rates
until inflation is brought down, even if that triggers a recession.
Investors are now looking forward to the release Friday of US non-farm
payroll jobs data for the latest glimpse at how the economy is handling rising
interest rates.
Data showing tougher labour market conditions could trigger a new relief
rally, while a resilient figure could send stocks lower as investors fret about
further rate hikes.
Data out Thursday showed first time unemployment claims dropped to 219,000,
but that was above expectations.
"The key takeaway from the report is that initial claims -- a leading
indicator -- have a lot more scope for deterioration before the Fed can be
convinced that its rate hikes have induced a sufficient softening in the labor
market to ease wage-based inflation pressures," said Patrick O'Hare at
Briefing.com.
- Oil prices steady
-
Oil prices failed to advance further after a decision by OPEC+ nations to
cut production by two million barrels per day, the biggest reduction in output
since the Covid-19 pandemic.
Oil prices, which had slumped to pre-Ukraine war levels in recent weeks as
global recession worries mount, had surged in the days ahead of the OPEC+
meeting.
The production cut should support crude prices, but as high oil prices have
been stoking the inflation that is prompting central banks to raise interest
rates, the move will further exacerbate the situation.
The pound was down about 0.8 percent against the dollar after Fitch ratings
agency lowered the outlook for British debt to negative from stable.
This after the government of new Prime Minister Liz Truss recently announced
a budget packed with debt-fuelled tax cuts.
Ahead of the downgrade Wednesday, sterling had plunged more than two percent
after Truss failed to reassure investors with a speech at her Conservative
party conference.
The pound, however, has recovered since reaching a record-low close to
parity against the dollar at the end of September.
- Key figures
around 1330 GMT -
London - FTSE 100: DOWN 1.0 percent at 6,984.45 points
Frankfurt - DAX: DOWN 0.2 percent at 12,487.60
Paris - CAC 40: DOWN 0.7 percent at 5,944.41
EURO STOXX 50: DOWN 0.3 percent at 3,437.26
New York - Dow: DOWN 0.4 percent at 30,156.75
Tokyo - Nikkei 225: UP 0.7 percent at 27,311.30 (close)
Hong Kong - Hang Seng Index: DOWN 0.4 percent at 18,012.15 (close)
Shanghai - Composite: Closed for a holiday
Pound/dollar: DOWN at $1.1223 from $1.1326 on Wednesday
Euro/dollar: DOWN at $0.9835 from $0.9889
Euro/pound: UP at 87.66 pence from 87.29 pence
Dollar/yen: UP at 144.79 yen from 144.59 yen
Brent North Sea crude: UP less than 0.1 percent at $93.41 per
barrel
West Texas Intermediate: FLAT at $87.76 per barrel
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