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Global stocks mixed amid worries over China, Italy
NEW YORK, Oct 20, 2018 (BSS/AFP) – An early rally on Wall Street fizzled
Friday as global bourses finished mixed amid a range of worries that included
Italy’s messy budget dispute with Brussels and slowing Chinese growth.
US stocks opened strongly following good earnings reports from Procter &
Gamble, American Express and others, but the market lost steam at midday. All
three major indices had slumped more than one percent on Thursday.
“In a week when developments seem more mixed than bearish, markets are
struggling to stabilize from an early-October shock that began in Bonds and
ended in Equities,” JPMorgan Chase said in a research note.
The analysts said earnings would be a positive catalyst for stocks over
the next two or three weeks, but warned of a medium-term hit after the period
of “peak” earnings growth ends.
The Nasdaq was the worst performing of the three major indices, ending
down 0.5 percent at 7,449.03, following a session in which it swung more than
150 points.
The S&P 500 finished with a small loss, while the Dow edged higher.
In Europe, the Frankfurt and Paris bourses declined, while London rose as
Italy’s fight with Brussels over its budget plan sparked worries about the
eurozone.
On Thursday, the European Commission formally warned Italy that its budget
plans for 2019 were a serious concern, demanding “clarifications” over Rome’s
“unprecedented” deviation from EU rules.
Late Friday afternoon, Moody’s downgraded Italy’s debt rating by a notch,
citing the “material weakening in Italy’s fiscal strength, with the
government targeting higher budget deficits for the coming years,” as well as
debt holding near the current 130 percent of GDP “rather than start trending
down as previously expected.”
– Chinese growth slows –
Earlier Friday, Asian stock markets also traded mixed, with Shanghai
bouncing back from early losses despite data showing Chinese economic growth
slowed to its weakest level in nine years.
MORE/HR/0928
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The world’s second largest economy expanded 6.5 percent year-on-year in
the July-September quarter as a campaign to tackle mounting debt took its
toll — along with trade frictions with the US.
It marked the worst performance since the start of 2009
Shanghai equities nevertheless finished the week with a rally after a rare
joint intervention by some of China’s top financial officials.
However the pronounced slowdown weighed on markets elsewhere because China
is a crucial driver of global economic growth.
“The Chinese economy is slowing — but that’s down to a deleveraging
process and concerns about trade and a global slowdown, as interest rates
rise,” CMC Markets analyst Michael Hewson said.
– Key figures around 2100 GMT –
New York – Dow Jones: UP 0.3 percent at 25,444.34 (close)
New York – S&P 500: DOWN less than 0.1 percent at 2,767,78 (close)
New York – Nasdaq Composite Index: DOWN 0.5 percent at 7,449.03 (close)
London – FTSE 100: UP 0.3 percent at 7,049.80 (close)
Frankfurt – DAX 30: DOWN 0.3 percent at 11,553.83 (close)
Paris – CAC 40: DOWN 0.6 percent at 5,084.66 (close)
Milan – FTSE MIB: FLAT at 19,080.16 (close)
EURO STOXX 50: FLAT at 3,210.82 (close)
Tokyo – Nikkei 225: DOWN 0.6 percent at 22,532.08 (close)
Hong Kong – Hang Seng: UP 0.4 percent at 25,561.40 (close)
Shanghai – Composite: UP 2.6 percent at 2,550.47 (close)
Euro/dollar: UP at $1.1511 from $1.1453 at 2100 GMT
Pound/dollar: UP at $1.3066 from $1.3018
Dollar/yen: UP at 112.50 from 112.21 yen
Oil – Brent Crude: UP 49 cents at $79.78 per barrel
Oil – West Texas Intermediate: UP 47 cents at $69.12 per barrel
BSS/AFP/HR/0930