BANGKOK (AP) – Shares were lower in Europe and Asia yesterday after a late afternoon sell-off wiped out gains for stocks on Wall Street.
Britain’s FTSE 100 fell 0.9 per cent to 7,518.47, while the DAX in Germany declined 1.2 per cent to 15,720.00. In Paris, the CAC 40 lost 1.2 per cent to 7,110.09. The future for the S&P 500 slipped 0.2 per cent while the future for the Dow industrials was flat.
The yield on the 10-year Treasury fell to 1.78 per cent from 1.83 per cent late Thursday.
On Thursday, the S&P 500 lost 1.1 per cent to a three-month low, with nearly 85 per cent of stocks in the index falling. It’s now down six per cent for the year.
The Nasdaq composite index fell 1.3 per cent and the Dow Jones Industrial Average sank 0.9 per cent.
In Asia yesterday, Tokyo’s Nikkei 225 index lost 0.9 per cent to 27,522.26 after Toyota Motor Corp announced production cuts due to parts shortages.
The Hang Seng in Hong Kong edged 0.1 per cent higher, regaining earlier losses, to 24,965.55. The Shanghai Composite index shed 0.9 per cent to 3,526.19.
Hong Kong-traded shares in e-commerce giant Alibaba fell 4.4 per cent after a Chinese-made documentary suggested its financial arm might be implicated in a corruption probe.
The S&P/ASX 200 in Sydney dropped 2.3 per cent to 7,175.80. South Korea’s Kospi slid 1.1 per cent to 2,830.82. Thailand’s benchmark fell 0.5 per cent.
Investors are bracing for higher interest rates and stocks are headed for weekly losses in what has so far been a losing month. Surging coronavirus cases have added to jitters over supply chain problems that are disrupting manufacturing.
Investors are closely watching to see how United States (US) employment data might affect the Federal Reserve approach to weaning the economy of its support by raising interest rates.
The Labor Department provided a disappointing update, reporting on Thursday that the number of Americans applying for unemployment benefits rose to its highest level in three months as the fast-spreading Omicron variant continued to disrupt the job market.
The job market has had a rocky recovery from the virus pandemic though the unemployment rate fell last month to a pandemic low of 3.9 per cent.
The Fed is now expected to raise rates earlier and more often than it had previously signalled to fight inflation that is threatening the economic recovery. Supply chain problems and higher raw materials costs have prompted businesses to raise prices on finished goods, leading consumers to eventually rein in spending.
The latest round of corporate earnings is also giving investors a clearer picture of where Americans are spending money and how inflation is impacting the economy.
In other trading, US crude oil lost USD1.61 to USD83.94 per barrel in electronic trading on the New York Mercantile Exchange. It shed 25 cents to USD85.80 on Thursday.
Brent crude oil, the basis for pricing international oil, lost USD1.43 to USD86.93 per barrel.
The US dollar fell to JPY113.83 from JPY114.10 late Thursday. The euro rose to USD1.1327 from USD1.1313.