World stocks mostly up after US inflation scare
Global stock markets mostly rose on Thursday as traders appeared to shake off concerns about soaring inflation in the United States.
Europe’s main equity indices finished higher after gains in Asia’s major markets.
In New York, the Nasdaq‘s tech shares gained back some of the ground lost in the prior session’s sell-off, while the Dow declined on a day that saw little economic news, since most government offices and the bond market were closed for the Veterans Day holiday.
Major US indices had closed lower for a second straight day on Wednesday after the release of data showing that American consumer prices saw their biggest gain in more than three decades last month, raising fears the Federal Reserve may be forced to change policy quickly.
Fed officials have insisted that the jump in inflation will be temporary as the global economy slowly returns to a semblance of normality next year in the wake of the coronavirus pandemic.
Thursday’s gains on the stock markets “would suggest investors are not too convinced the Fed will change course at its next policy meeting in December, even though inflation signals have really tested the central bank’s ‘transitory’ term,” said ThinkMarkets analyst Fawad Razaqzada.
“The market may perhaps give the Fed that extra bit of doubt just in case we might have seen peak inflation,” Razaqzada said.
US markets have soared during the Covid-19 pandemic thanks in part to the Fed’s zero-rate and stimulus policies, and investors worry the central bank could be forced to undo those rapidly in the face of the price increases.
Oliver Allen, an analyst at Capital Economics, said Wall Street equities have likely “shrugged off” this year’s surge in inflation “because it has not coincided with either a rise in the real yields of (US) Treasuries or weakness in corporate earnings.”
The prospect of a potential rate hike helped the dollar rise against other major currencies, while oil prices rebounded after dropping over inflation concerns.
OPEC lowered its forecast for growth in world oil demand in 2021 due to weaker demand in major consumers China and India, and higher energy prices.
– Slowdown in Britain –
The growth outlook was also in focus as Brussels on Thursday raised its forecast for eurozone output this year.
At the same time, official data showed Britain’s economic recovery slowed sharply in the third quarter on supply constraints as countries reopen after pandemic lockdowns. London’s FTSE 100 nonetheless closed higher.
In Asia, Bloomberg News reported that teetering Chinese property giant Evergrande had again stumped up the cash for interest on bonds, slightly easing concerns about its imminent collapse and potential spread outside China.
– Key figures around 2115 GMT –
New York – Dow: DOWN 0.4 percent at 35,921.23 (close)
New York – S&P 500: UP 0.1 percent at 4,649.27 (close)
New York – Nasdaq: UP 0.5 percent at 15,704.28 (close)
London – FTSE 100: UP 0.6 percent at 7,384.18 (close)
Frankfurt – DAX: UP 0.1 percent at 16,083.11 (close)
Paris – CAC 40: UP 0.2 percent at 7,059.55 (close)
EURO STOXX 50: UP 0.2 percent at 4,358.00 (close)
Tokyo – Nikkei 225: UP 0.6 percent at 29,277.86 (close)
Hong Kong – Hang Seng Index: UP 1.0 percent at 25,247.99 (close)
Shanghai – Composite: UP 1.2 percent at 3,532.79 (close)
Euro/dollar: DOWN at $1.1449 from $1.1479 at 2100 GMT
Pound/dollar: DOWN at $1.3365 from $1.3405
Dollar/yen: UP at 114.08 yen from 113.87 yen
Euro/pound: UP at 85.66 pence from 85.60 pence
Brent North Sea crude: DOWN 0.1 percent at $82.56 per barrel
West Texas Intermediate: DOWN 0.2 percent at $81.17 per barrel