Malay Mail Online

Money

Global markets falter, focus on central banks

Mario Draghi (right), President of the European Central Bank (ECB), and US Federal Reserve chief Janet Yellen attend an ECB conference at ECB headquarters in Frankfurt am Main, Germany, November 14, 2017. — AFP picLONDON, Nov 14 — Global equity markets faltered today, slipping into the red after a weaker opening on Wall Street, as investors awaited key speeches from powerful central bank chiefs.

London managed to inch 0.1 per cent higher on bright news from supermarket giant Tesco and mobile phone titan Vodafone, with extra support from a weak pound.

But Frankfurt and Paris were in negative territory following the softer start on Wall Street.

Oanda analyst Craig Erlam said there were signs “that markets are starting to look a little overextended.”

Following a relatively uninterrupted rally in equity markets over the last couple of months, many market observers were now beginning to “question whether a correction of some kind is both warranted and healthy,” the expert said.

“Despite another strong earnings season, the rally has stalled which suggest we may now be a levels again that investors can’t justify going far above, which may leave them susceptible to a pull back, even one that isn’t particularly large,” he said.

Dealers were also are keeping an eye on a European Central Bank conference in Frankfurt on Tuesday, with speeches from Federal Reserve chief Janet Yellen, ECB head Mario Draghi and Bank of England governor Mark Carney.

Tesco, Vodafone soar

Tesco topped London’s risers’ board, rallying 6.9 per cent to 189 pence, after Britain’s competition regulator gave the provisional green light to the supermarket giant’s takeover of wholesaler Booker worth £3.7 billion.

Vodafone stock surged 5.53 per cent to 227.95 pence after the mobile phone group revealed it rebounded back into first-half net profit on cost-cutting and keen demand.

London won extra support from the pound, which slid as official data showed Britain’s annual inflation rate held at a five-year high of 3.0 per cent in October.

A weak pound tends to boost the share prices of multinationals.

Meanwhile, investors awaited movement on stalled US tax cuts with fears growing that the reform push could come off the rails.

After weeks of gains fuelled by strong earnings and optimism about the global economy, world markets have been tempered in recent days as dealers cash out and valuations sit unnervingly high.

World markets had surged on hopes for lower taxes when Donald Trump was elected US president one year ago.

Later this week, the US will also release key inflation and retail sales figures, providing markets with more clues about the Fed’s plans for raising interest rates.

Key figures around 1545 GMT

New York – DOW: DOWN 0.3 per cent at 23,376.26 points

London – FTSE 100: UP 0.1 per cent at 7,425.45

Frankfurt – DAX 30: DOWN 0.2 per cent at 13,048.86

Paris – CAC 40: DOWN 0.4 per cent at 5,318.71

EURO STOXX 50: DOWN 0.4 per cent at 3,560.25

Tokyo – Nikkei 225: FLAT at 22,380.01 (close)

Hong Kong – Hang Seng: DOWN 0.1 per cent at 29,152.12 (close)

Shanghai – Composite: DOWN 0.5 per cent at 3429.55 (close)

Euro/dollar: UP at US$1.1745 from US$1.1715

Dollar/yen: DOWN at 113.53 yen from 113.72 yen

Pound/dollar: FLAT at US$1.3105

Oil – Brent North Sea: DOWN 61 cents at US$62.54 per barrel

Oil – West Texas Intermediate: DOWN 48 cents at US$56.28

— AFP