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Withdrawal of world stock markets

Updated: 10:00 06-03-2017

World equity markets mostly fell on Friday after a broad global rally triggered by expectations that the Federal Reserve will hike interest rates this month.

Investors took their cash off the table in profit-taking after a mid-week surge fuelled by US President Donald Trump's address to Congress, in which he promised massive infrastructure spending and tax cuts.

But with Fed boss Janet Yellen due to speak Friday, the greenback was largely higher as experts said the bank was odds-on to tighten monetary policy in the face of an improving US economy.

"The week has been dominated by the incredible rise in US rate rise expectations," said Joshua Mahony, market analyst at IG trading group.

"There's no doubt there is a chance we could see a US rate rise this month."

Comments from three top Fed officials have cemented those expectations.

"The Fed rate hike balloon has successfully been floated," said Oanda trader Stephen Innes.

Even Fed governor Lael Brainard, a so-called "dove" on monetary policy, suggested rates could rise soon.

- 'Fait accompli' -

The "hawks" at the Federal Reserve are more concerned about the threat of rising inflation, especially if tax cuts and spending fuel the economy, but the "doves" warn of the risk of raising interest rates based on policies that have not been announced, and whose implications cannot yet be measured.

"With Brainard flying the dove's coup, she has tipped the scales in overwhelming favour of a rate hike as the market now views March as fait accompli," said Oanda's Innes.

The main focus of attention in the US on Thursday was the initial public offering of Snap Inc, the parent company of instant messaging service Snapchat, which observers said could be the hottest new listing this year.

Snap surged 44 percent in its trading debut.

On Friday, the dollar, which has swung wildly as investors try to gauge Trump's plans and veiled Fed messages, broke above 114 yen for the first time in two weeks on Thursday and remained above the level heading into the weekend break.

Elsewhere, oil prices climbed after tumbling more than two percent Thursday in reaction to the stronger dollar — which makes the commodity more expensive for holders of other currencies — and news that Russia was well short of its promised output cuts.

Despite agreeing to slash production as part of a deal with global producers to address a global glut, Moscow's reductions were only a third of what it pledged in January and February.

- Key figures around 1115 GMT -

London – FTSE 100: DOWN 0.2 percent at 7,367.05 points

Frankfurt – DAX 30: DOWN 0.2 percent at 12,034.20

Paris – CAC 40: UP 0.3 percent at 4,979.24

EURO STOXX 50: UP 0.3 percent at 3,393.08

Tokyo – Nikkei 225: DOWN 0.5 percent at 19,469.17 (close)

Hong Kong – Hang Seng: DOWN 0.7 percent at 23,552.72 (close)

Shanghai – Composite: DOWN 0.4 percent at 3,218.31 (close)

New York – Dow: DOWN 0.5 percent at 21,002.97 (close)

Euro/dollar: UP at $1.0537 from $1.0507

Pound/dollar: DOWN at $1.2229 from $1.2267

Dollar/yen: UP at 114.41 yen from 114.40 yen

Oil – Brent North Sea: UP 51 cents at $55.29 per barrel

Oil – West Texas Intermediate: UP 15 cents at $52.76


Source: AFP Published: 15:45 03-03-2017

Posted by on March 3, 2017.

Categories: Business World News

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Updated: 21:46 26-May-2018