AP – European shares opened higher yesterday and Asian stocks retreated after United States (US) markets were closed to observe a National Day of Mourning for former President Jimmy Carter.
Germany’s DAX was flat at 20,316.29, while the CAC 40 in Paris slipped 0.1 per cent to 7,486.82. In London, the FTSE edged 0.1 per cent lower, to 8,312.55.
The future for the S&P 500 was down 0.4 per cent while that for the Dow Jones Industrial Average was 0.3 per cent lower.
Markets in Asia saw a broad decline that analysts said reflects weakening confidence about the chances of further interest rate cuts by the Federal Reserve (Fed) given recent data showing unexpected strength in the US economy.
Minutes from a December 17-18 meeting released this week showed Fed officials expected to dial back the pace of interest rate cuts this year in the face of persistently elevated inflation and the threat of widespread tariffs increases under President-elect Donald Trump and other potential policy changes.
“It appears that markets, at some level, are fretting (over) the risk that the Fed will keep policy a lot more restrictive than is conducive for sustaining unbridled ‘risk on,'” Tan Jing Yi of Mizuho Bank said in a commentary.
Uncertainties over how aggressively Trump might pursue higher tariffs against other countries once he takes office also have left investors cautious just days ahead of the January 20 inauguration.
“Increased tariffs against Chinese goods are a given, but it is unclear which other economies in the region will be targeted and whether universal tariffs are still on the table,” ANZ Research said in a report.
Attention was focused on a US non-farms jobs report due from the Labor Department later in the day.
In Tokyo, the Nikkei 225 index lost 1.1 per cent to 39,190.40, while South Korea’s Kospi shed 0.2 per cent to 2,515.78.
Chinese markets extended losses, with the Hang Seng in Hong Kong down 0.9 per cent at 19,064.29. The Shanghai Composite index fell 1.3 per cent, to 3,168.52.
