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EUROPE-MARKETS
European markets extend rally on US data
LONDON, Nov 1, 2018 (BSS/AFP) – World stock markets rallied Wednesday with
no “Halloween horrors” as investors were boosted by runaway US consumer
confidence and upbeat corporate earnings, dealers said.
In afternoon trading, Frankfurt was up 1.3 percent, London won 1.5 percent
and Paris surged 2.2 percent, with shares in French cosmetics giant L’Oreal
soaring 6.8 percent on strong sales.
Wall Street opened higher, extending Tuesday’s rally, with the Dow Jones
Industrial Average climbing 0.9 percent in the first minute of trading.
“No Halloween horrors as Red October draws to a close,” concluded CMC
Markets analyst Michael Hewson.
October has been a painful month for equities with sometimes massive
losses and observers warn of further pain, with Washington and Beijing
seemingly unlikely to back down from their tariffs stand-off anytime soon.
Europe’s markets had faltered Tuesday, also on weak economic data and
political uncertainty over Italy and Germany.
The euro hit a fresh two-month low at $1.1313 on Wednesday. The dollar
struck 6.9783 yuan, the highest level for a decade as the Chinese currency is
pressured by US trade war fears.
However, New York turned in a healthy performance Tuesday — the Dow added
1.8 percent while the S&P 500 and Nasdaq jumped 1.6 percent — after data
showed US consumer confidence at a new 18-year high in October.
The positive tone spilled across into Asia, where equities leapt Wednesday
with attention also turning to the release of key US jobs data later in the
week.
“There’s been a strong rally in stock markets… as investors seek to
recover from the recent declines,” noted XTB analyst David Cheetham.
IG analyst Joshua Mahony noted however that “this bullish market sentiment
comes despite a somewhat dour 24-hours for the global growth picture”.
But analysts at Charles Schwab brokerage said “a string of upbeat earnings
reports on both sides of the pond (are) helping offset lingering trade, Fed,
and global growth uneasiness.”
– Markets licking wounds –
Despite Wednesday’s rally, a mountain of problems — from China-US trade
tensions and Brexit, to Chinese economic weakness and rising US interest
rates — have not gone away.
“Even after this morning’s gains, global equity markets are left licking
their wounds after a brutal month,” noted Cheetham at XTB.
“Ongoing US-Chinese trade tensions, slowing global growth and rising US
interest rates all have contributed to the sell-off and the question going
forward now is whether the worst of it is over or if there’s another wave of
selling into year-end.
“The recent stabilisation is a pleasing development at least,” he added.
Meanwhile, a strong jobs report out of Washington Friday could provide
more evidence for the US Federal Reserve to hike rates and put further upward
pressure on the greenback.
Bitcoin, marking its 10th anniversary, dipped to $6,255.27.
BSS/AFP/HR/0945