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Stock markets diverged Monday as traders reacted to weak global data and political uncertainty in Spain, while awaiting key interest-rate decisions due this week. bulletin news
Wall Street’s top indices pushed higher at the start of trading, with the Dow adding 0.2 percent.
Europe’s main indices dipped in afternoon deals, with Madrid down 0.7 percent as Spanish Prime Minister Pedro Sanchez and his right-wing rival try to head off a fresh vote after an inconclusive snap election resulted in a hung parliament.
Asia’s top stock markets were a mixed bag amid concern over weakness in the Chinese economy.
China’s top leaders said the world’s second-biggest economy was facing “new difficulties and challenges” in a meeting of the 24-person Politburo on Monday.
“This week may be one of the most important of the year considering the intensity of macro events and as the US earning season picks up,” said Walid Koudmani, chief market analysts at XTB online investing firm.
US tech giants including Amazon, Google owner Alphabet, Facebook parent Meta and Microsoft are releasing second quarter earnings reports this week.
On top of that, the US Federal Reserve is expected to announce another rate hike on Wednesday in its fight against inflation, followed by a similar decision by the European Central Bank on Thursday.
A string of positive US data in recent months has given the Fed some room to take its foot off the pedal and allow the economy to avert a feared recession.
But in the eurozone, economic activity shrank at its fastest rate for eight months in July, as a contraction gathered pace on the back of cuts in manufacturing, according to the HCOB Flash Eurozone purchasing managers’ index (PMI).
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The ECB “will raise rates this week as planned, but with economic weakness spreading, the outcome of the September meeting is becoming an increasingly close call”, noted UniCredit economist Tullia Bucco.
“With headline inflation decelerating and the labour market starting to soften, a forward-looking analysis would point to no more tightening beyond this week.”
Separate PMI data Monday showed the UK’s private sector appearing to have slammed the brakes on growth.
“The UK economy has come close to stalling in July which, combined with gloomy forward-looking indicators, reignites recession worries,” said Chris Williamson, chief business economist at S&P Global Market Intelligence.
“July’s flash PMI survey data revealed a deepening manufacturing downturn accompanied by a further cooling of the recent resurgence of growth in the service sector.”
On the corporate front, shares in British online supermarket Ocado surged more than 12 percent after it settled a dispute over robot patents with Norwegian company AutoStore.
Oil prices rose as recent production cuts by OPEC members and allies outweighed concerns about demand as potential recessions loom in several major consuming nations.
XTB’s Koudmani noted that while Brent his currently holding above $80 per barrel, this has been a difficult area for it to break through.
“If it fails to do so we could be seeing a new pullback while a continuation of the upward move may signal a widespread change in sentiment,” he said.
Key figures around 1330 GMT
New York – Dow: UP 0.2 percent at 35,283.64 points
London – FTSE 100: DOWN 0.1 percent at 7,652.67
Frankfurt – DAX: DOWN 0.1 percent at 16,158.26
Paris – CAC 40: DOWN 0.4 percent at 7,402.62
EURO STOXX 50: DOWN 0.5 percent at 4,371.83
Tokyo – Nikkei 225: UP 1.2 percent at 32,700.94 (close)
Hong Kong – Hang Seng Index: DOWN 2.1 percent at 18,668.15 (close)
Shanghai – Composite: DOWN 0.1 percent at 3,164.16 (close)
Euro/dollar: DOWN at $1.1083 from $1.1131 on Friday
Pound/dollar: DOWN at $1.2826 from $1.2852
Euro/pound: DOWN at 86.39 pence from 86.56 pence
Dollar/yen: DOWN at 141.17 yen from 141.77 yen
Brent North Sea crude: UP 0.5 percent at $81.50 per barrel
West Texas Intermediate: UP 0.7 percent at $77.61 per barrel
burs-rl/lth
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