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Sunday, October 17, 2021

Stock markets retreat

Stock markets retreatLONDON: Stock markets were awash with red on Tuesday as investors took profits following recent rallies, while awaiting a deluge of company and economic announcements.

European indices were down across the board in late morning deals following sharper losses in Asia and on Wall Street.

The Paris CAC 40 came close to crossing over into positive territory however as official data showed the French economy notching up its fastest growth in six years, expanding by 1.9 percent in 2017.

“European markets were on the back foot after taking their cue from a bruising session in Asia and a bad day in New York on Monday that saw the Dow give up 177 points after hitting a record high in the previous session,” said Neil Wilson, senior market analyst at ETX Capital.

Higher US bond yields weighed on sentiment, while investors were cautious ahead of a Federal Reserve meeting Wednesday and a host of major earnings reports, including from technology heavyweights, due this week.

Yields on bonds are rising as central banks move to reduce massive injections of cash stimulus that has helped to prop up the global economy since the financial crisis of a decade ago.

“Certainly the dynamics have shifted in bond markets,” noted Wilson.

“Central banks are either out of the market or buying fewer bonds. The Fed is now in the business of selling not buying.”

– Global sell-off –

In the US meanwhile, all three major indices fell Monday in one of the few down days of 2018. Asia extended the global sell-off into Tuesday, with Tokyo, Hong Kong, Seoul, Taipei, Jakarta and Manila all tumbling more than one percent.

“While the surge in US bond yields has factored, I suspect the busy week ahead on both corporate and economic news has investors reducing risk while banking some well-earned profits,” said Stephen Innes, head of Asia-Pacific trading at OANDA.

This week’s earnings calendar includes tech giants Amazon, Apple and Facebook, as well as traditional blue chip companies such as Boeing, ExxonMobil and McDonald’s.

Investors have been cheered thus far by better-than-expected results and upbeat outlooks in the wake of US tax cuts.

But after a wave of Wall Street records in the first month of the year, they are nervous that stocks “may be priced for perfection” heading into the busiest stretch of earnings season, one analyst said.

Apple slid more than two percent on Monday after the Nikkei daily reported it was slashing production of its latest iPhone model, adding to worries about the company’s earnings.

The tech giant will halve production of the iPhone X in the three-month period from January from the level envisaged at the time of its release in November, the business paper said.

Apple suppliers were among those hit in Asia Tuesday, with Sony and electronics components maker Murata both losing 1.9 percent.

In Taipei, Hon Hai Precision fell 1.2 percent and Taiwan Semiconductor Manufacturing sank 2.1 percent.

Copyright AFP (Agence France-Press), 2018

Source: Brecorder.com

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