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Global stocks mixed as some warn of more volatility ahead
NEW YORK, Feb 23, 2018 (BSS/AFP) – Global stocks were mixed Thursday amid
uncertainty over US monetary policy and lackluster economic data in Germany
and Britain.
US stocks finished mostly higher after two down days, but market insiders
continued to warn of more volatility ahead as investors ponder whether the
Federal Reserve will accelerate its interest rate hikes to address higher
inflation.
Higher interest rates could crimp growth and prod investors to steer funds
away from equities towards bonds. Investors have ping-ponged between feeling
encouraged at the pickup in economic growth and worried about inflation.
But after a year of steady upward movement, some think stocks prices are
inflated.
“Despite the correction, the market is still too high,” said Phil Davis of
PSW Investment, who said stock valuations remain excessive relative to
corporate earnings.
“The market needs to come back down.” Davis said. “I have a bullish overall
outlook but at this particular moment it is overpriced.”
The Dow was by far the outperformer of the US indices, climbing 0.7
percent, with oil giants ExxonMobil and Chevron gaining on higher oil prices
following a bullish US oil inventory report.
European equities were mixed with Paris edging higher but Frankfurt dipping
after the closely-watched Ifo institute’s survey of German business
confidence sagged in February as companies fear the current favorable
combination of strong growth, low interest rates and low inflation could be
coming to an end.
“Germany’s very favorable business climate cooled down considerably this
month,” Ifo head Clemens Fuest said.
London’s benchmark FTSE 100 index also underperformed as investors grappled
with a raft of company results and a slight downgrading of 2017 UK growth.
Weaker still was Tokyo’s Nikkei, which slid 1.1 percent following
Wednesday’s decline in US stocks, as market sentiment remained fragile after
recent volatility.
MORE/MR/ 1023 hrs
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“While the market appears to have hit the near-term bottom, investor
sentiment has yet to fully recover following recent volatile trade,” Hikaru
Sato, senior technical analyst at Daiwa Securities, told AFP.
Among other markets, the dollar pulled back after Wednesday’s rise, after
European Central Bank minutes showed policy makers moving cautiously towards
beginning to prepare markets for an exit from ultra-easy monetary policy.
“The ECB minutes weren’t overwhelmingly hawkish but they were good enough to
drive the currency higher,” said BK Asset Management managing director Kathy
Lien.
– Key figures around 2150 GMT –
New York – DOW: UP 0.7 percent at 24,962.48 (close)
New York – S&P 500: UP 0.1 percent at 2,703.96 (close)
New York – Nasdaq: DOWN 0.1 percent at 7,210.09 (close)
London – FTSE 100: DOWN 0.4 percent at 7,252.39 (close)
Frankfurt – DAX 30: DOWN 0.1 percent at 12,461.91 (close)
Paris – CAC 40: UP 0.1 percent at 5,309.23 (close)
EURO STOXX 50: UP 0.1 percent at 3,433.15
Tokyo – Nikkei 225: DOWN 1.1 percent at 21,736.44 (close)
Hong Kong – Hang Seng: DOWN 1.5 percent at 30,965.68 (close)
Shanghai – Composite: UP 2.2 percent at 3,268.56 (close)
Euro/dollar: UP at $1.2323 from $1.2284 at 2200 GMT
Pound/dollar: UP at $1.3952 from $1.3918
Dollar/yen: DOWN at 106.74 yen from 107.78 yen
Oil – West Texas Intermediate: UP $1.09 at $62.77 per barrel
Oil – Brent North Sea: UP 97 cents at $66.39 per barrel.
BSS/AFP/MR/ 1023 hrs