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Wednesday, July 6, 2022

World stocks enjoy timid rebound

World stocks enjoy timid rebound

LONDON: World stock markets enjoyed a rebound on Wednesday after a major selloff linked to geopolitical fears, but dealers said investors’ nervousness was keeping a lid on gains.

European equity markets extended morning gains after Tokyo closed higher, and Wall Street also showed signs of new-found strength shortly after the opening bell, with investors welcoming strong results from Boeing.

“While we may be seeing some temporary respite, there is clearly still a huge amount of anxiety in the markets right now,” noted Oanda senior market analyst Craig Erlam.

Investors around the world have been fleeing riskier assets in search of safety as a wave of negative issues dominates the news.

The euro, meanwhile, hit a two-month low, before paring early losses, while oil prices rebounded from the previous day’s heavy losses.

Oil’s main Brent and WTI contracts plunged more than four percent Tuesday after Saudi Energy Minister Khalid al-Falih said the major producer would boost output and spare capacity to help maintain supplies.

Prices had hit four-year highs this month with sanctions due to be imposed on Iran, while Venezuela remained in political and economic crisis and US data pointed to a pick-up in demand.

Global stocks tumbled Tuesday, with Frankfurt losing more than two percent, on geopolitical risks stretching from US tensions with Russia and Saudi Arabia to trade issues with China, as well as Italy’s budget stand-off with the European Union.

Traders reacted Wednesday also to news that business growth in the 19-nation eurozone dropped in October to the lowest point in two years, hit by falling exports.

In a first estimate, data monitoring company IHS Markit said slowing exports extended to the service sector, with companies’ expectations of future growth at the lowest level in nearly four years.

Investors are also keeping an eye on eurozone member Italy after the EU rejected the populist government’s big-spending budget, the first time it has turned a member away over spending rules violations.

With Rome likely to ignore the decision, the move puts the two on course for a clash, just as the EU struggles to reach a deal for Britain to leave the bloc with a deadline imminent.

– Key figures around 1330 GMT –

London – FTSE 100: UP 1.1 percent at 7,028.96 points

Frankfurt – DAX 30: UP 0.6 percent at 11,337.95

Paris – CAC 40: UP 1.2 percent at 5,027.28

EURO STOXX 50: UP 1.0 percent at 3,171.00

New York – Dow: UP 0.2 percent at 25,246.03

Tokyo – Nikkei 225: UP 0.4 percent at 22,091.18 (close)

Hong Kong – Hang Seng: DOWN 0.4 percent at 25,249.78 (close)

Shanghai – Composite: UP 0.3 percent at 2,603.30 (close)

Euro/dollar: DOWN at $1.1413 from $1.1472 at 2040 GMT

Pound/dollar: DOWN at $1.2918 from $1.2985

Dollar/yen: UP at 112.61 from 112.41 yen

Oil – Brent Crude: UP 47 cents at $76.91 per barrel

Oil – West Texas Intermediate: UP 70 cents at $67.13

Copyright AFP (Agence France-Press), 2018
 


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