ZCZC
BCN-10,11
EUROPE-MARKETS
Bears sink teeth into Apple, bulls run on China ends
PARIS, Nov 3, 2018 (BSS/AFP) – A stocks rally on hopes of a US-China trade
deal ran out of steam on Friday as the rising certainty of further US
interest rates increases chilled fervour for equities.
Investors took the shine off Apple shares, which plunged 6.8 percent on a
disappointing holiday season forecast and word that it will stop reporting
how many iPhones it sells.
Trading in Asia started with a bang after US President Donald Trump hailed
positive talks with Chinese counterpart Xi Jinping, which was a rare sign of
hope in the stand-off between the world’s top two economies.
A later report said he had asked officials to draw up a draft bill as he
eyes a potential trade deal between the two.
Hong Kong jumped more than four percent, while Shanghai and the yuan
soared as dealers seized on the news, hoping for a breakthrough in a rift
that has rocked global equities and fuelled warnings about global growth.
European shares also benefitted from the positive sentiment in the
morning, as did Wall Street at the open, but later reports of US officials
saying there was a long way to go before a deal took the steam out of the
rally.
“The announcement cooled the mood a little,” said market analyst David
Madden at CMC Markets UK.
The yuan also rallied to 6.8961 to the dollar — its best rate since mid-
October — well off the 10-year lows around 6.97 on Thursday.
– Rate hikes ‘on track’ –
In the United States, data that showed the economy added 250,000 net new
positions in October, handily overshooting forecasts, also helped cut short
the equity rally.
That data, along with the fastest gain in wages since April 2009 at a 3.1
percent annual increase, helped cement expectations the US Federal Reserve
will continue to gradually increase interest rates.
“Investors viewed all this through (US Federal Reserve Chairman) Jerome
Powell’s glasses,” said Spreadex analyst Connor Campbell.
MORE/HR/0928
ZCZC
BCN-11
EUROPE-MARKETS 2 LAST PARIS
“The strength of the US economy, as suggested by that data, likely
mitigates some of the concerns caused by October’s market correction, and
leaves the Federal Reserve on track to raise interest rates in December, with
the potential for three or more hikes across 2019,” he added in a note to
clients.
Rising bond yields, in anticipation of the interest rate hike, reduced the
attractiveness of equities and bolstered the dollar.
Oil prices fell further after Thursday’s plunge of more than two percent
on oversupply worries, as Washington announced on Friday it will allow eight
countries to continue importing Iranian oil, at lower levels, despite US
sanctions on Iran coming back into place within days.
The commodity has lost around 15 percent from four-year highs at the start
of last month as Russia and OPEC said they would bolster output to ease
supply concerns due to the sanctions.
Dealers have also been concerned about the impact on demand from a trade
war between China and the US.
– Key figures around 1630 GMT –
New York – Dow: DOWN 0.5 percent at 25,267.66 points
London – FTSE 100: DOWN 0.3 percent at 7,094.12 (close)
Frankfurt – DAX 30: UP 0.4 percent at 11,518.99 (close)
Paris – CAC 40: UP 0.3 percent at 5,102.13 (close)
EURO STOXX 50: UP 0.4 percent at 3,218.35
Tokyo – Nikkei 225: UP 2.6 percent at 22,243.66 (close)
Hong Kong – Hang Seng: UP 4.2 percent at 26,486.35 (close)
Shanghai – Composite: UP 2.7 percent at 2,676.48 (close)
Pound/dollar: DOWN at $1.2969 from $1.3004 at 2100 GMT
Euro/dollar: DOWN at $1.1384 from $1.1407
Dollar/yen: UP at 113.25 yen from 112.62 yen
Oil – West Texas Intermediate: DOWN 46 cents at $63.23 per barrel
Oil – Brent Crude: DOWN 12 cents at $72.77 per barrel
BSS/AFP/HR/0930