Stock markets slump at end of volatile week

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LONDON: Stock markets plunged once again Friday after US titans Amazon and Google-parent Alphabet missed key earnings targets, and geopolitics, Italian debt and Brexit worries clouded the outlook for the global economy.

Fresh hefty losses came at the end of a hugely volatile trading week that has wiped out all 2018 gains for some markets.

“Risk aversion is alive and kicking on Friday, as weaker than expected tech earnings trigger the latest stampede and those still buying the dips once again get burned,” said Craig Erlam at Oanda.

Amazon and Alphabet shares tumbled at the New York open, pushing the Nasdaq more than 2.5 percent down, while the Dow fell 1.0 percent.

– ‘Nervous wreck’ –

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“Tech companies have raised the bar so high in recent years that the numbers reported by Amazon and Alphabet just weren’t quite spectacular enough, not at a time when investors are a nervous wreck and fleeing for safety at the first sign of danger,” he said.

The euro recovered against the dollar after posting a fresh two-month low point Thursday amid concerns over Italy’s debt pile.

S&P Global is to deliver an update on Italy’s debt ratings after the markets’ close Friday.

The dollar meanwhile struck a decade-high at 6.9682 against the yuan as US-China trade tensions rumble on.

Sterling hit a two-month low point under $1.28 ahead of Britain’s annual budget announcement Monday, the last before the country exits the EU in March.

Following losses at the start of the week, stock markets showed signs of recovery Thursday before diving once more ahead of the weekend break.

– ‘Dead cat bounce’ –

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“Any hope that Thursday’s recovery was anything more than a dead cat bounce was short-lived,” said Erlam.

Amazon reported Thursday that its net profit in the recently-ended quarter rocketed to $2.9 billion, a ten-fold increase from the same period last year.

However, analysts had expected an even stronger performance, prompting shares to sink 8.8 percent to $1,643 in after market trades.

There was a similar situation for Alphabet, whose third-quarter net profit surged 36 percent to $9.2 billion — but its shares slumped 4.8 percent on market disappointment with revenue growth.

Asian investors also took flight Friday, with Hong Kong’s main index closing down 1.1 percent, while Tokyo ended 0.4-percent lower and Shanghai gave up 0.2 percent.

Singapore dived 1.4 percent and Seoul shed 1.8 percent. However, Wellington was marginally higher and Manila added more than one percent.

Elsewhere Friday, oil prices continued to retreat from their four-year highs seen at the start of the month.

– Key figures around 1330 GMT –

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London – FTSE 100: DOWN 1.3 percent at 6,914.66 points

Frankfurt – DAX 30: DOWN 1.1 percent at 11,184.86

Paris – CAC 40: DOWN 1.7 percent at 4,945.62

Milan – FTSE MIB: DOWN 1.2 percent at 18,588.26

EURO STOXX 50: DOWN 1.3 percent at 3,124.47

New York – Dow: DOWN 1.0 percent at 24,739.57

Tokyo – Nikkei 225: DOWN 0.4 percent at 21,184.60 (close)

Hong Kong – Hang Seng: DOWN 1.1 percent at 24,717.63 (close)