FT: Eurozone concerns weigh on stocks and help dollar
Please use the link to reference this article. Do not copy & paste articles which is a breach of FT.com's Ts&Cs (www.ft.com/servicestools/help/terms) and is copyright infringement. Send a link for free or email ftsales.support@ft.com to purchase rights. http://www.ft.com/cms/s/0/04d45e7c-f061-11df-88db-00144feab49a.html#ixzz15Krbjdi8
Monday 07:00 GMT. European fiscal woes and Asia growth hopes are battling for dominance, leaving investors to peck selectively at riskier assets following last week’s wobble.
The FTSE All-World index is down 0.2 per cent, the performance of commodities is varied, the dollar is slightly stronger and benchmark Treasury yields are a bit higher.
Please use the link to reference this article. Do not copy & paste articles which is a breach of FT.com's Ts&Cs (www.ft.com/servicestools/help/terms) and is copyright infringement. Send a link for free or email ftsales.support@ft.com to purchase rights. http://www.ft.com/cms/s/0/04d45e7c-f061-11df-88db-00144feab49a.html#ixzz15Krcgbcg
US equity futures suggest a 1 point gain for the S&P 500 when Wall Street opens.
Highlighting the vagaries of a so-far mixed session, Chinese stocks are still suffering from worries about possible interest rate rises while Tokyo is higher after third-quarter GDP exceeded forecasts.
The euro remains under pressure as traders continue to be concerned about the debt difficulties of Ireland and other so-called “peripheral” eurozone nations.
The China and eurozone worries were the main factors behind last week’s 2 per cent fall in the All-World and the Reuters-Jefferies CRB index.
The stock and commodity benchmarks retreated from two-year highs that had been reached primarily on hopes for the rejuvenating properties of the Federal Reserve’s $600bn quantitative easing programme.
But it appears that the wash from QE2 is no longer lifting all boats. Certainly the dollar’s strengthening since QE2’s confirmation suggests the programme may have been discounted by the market.
This might mean more fundamental catalysts – corporate and macroeconomic – may carry greater heft than they have in recent weeks. In this regard, the auspices are, again, mixed.
The European and US third-quarter earnings season has been well-received, and the latest US jobs data have shown signs of improvement. The problem for bulls is that the Fed has made clear that continuation of QE2 will be depend on data. It is therefore possible that those traders who feel QE2 is an important crutch for assets will start to perceive good news as “bad news”. That's a difficult circle to square if investors are to engineer a Santa Claus rally.
Asia-Pacific. Trading is varied, with Japanese stocks a bright spot as they get a lift from stronger-than-expected economic growth and as a softer yen helps exporters.
Asian investors are still cautious amid renewed concerns about European debt problems along with China’s possible monetary policy tightening, as Beijing looks to ways to curb inflation and asset price bubbles. Over the weekend, European leaders urged Ireland to accept the EU’s €500bn emergency bailout to stabilise financial markets, although Ireland denied the need of assistance.
The FTSE Asia Pacific Index is down 0.4 per cent with Tokyo’s Nikkei 225 Stock Average up 1.1 per cent. South Korea’s Kospi Composite rose 0.04 per cent, with trading subdued ahead of the Bank of Korea monetary policy meeting on Tuesday, when interest rates are likely to be raised to curb inflation.
Australia’s S&P/ASX 200 closed down just 0.1 per cent higher and and New Zealand’s NZX-50 added 0.5 per cent.
China’s Shanghai Composite Index is down 0.1 per cent, extending Friday’s 5.2 per cent plunge. In Hong Kong, the Hang Seng index is down 0.7 per cent.
