European stocks steady as Wall Street halts rout
European stocks managed a late recovery Friday to close steady, helped by an attempt in US markets to recover some of the previous day’s sharp losses.
But political turbulence in Washington, renewed fears over US-China relations and economic growth strains weighed on markets, with oil prices testing lows not seen since the summer of 2017.
“It has been a remarkably terrible trading week for financial markets amid concerns over rising US interest rates, decelerating global growth, Brexit uncertainty and chaos in Washington,” said Lukman Otunuga, a research analyst at FXTM.
US equities were mildly firmer in the late New York morning as they struggled to claw back some of the two percent the Dow lost during a torrid session Thursday — the latest losses in a bruising December that has set up Wall Street for its worst year since the 2007 financial crisis.
Dow member Nike’s stock jumped after the company reported a 10.4 percent increase in quarterly earnings.
London and Frankfurt posted slim gains at the close while Paris ended unchanged as the prospect of an embarrassing Christmas time shutdown of the US government loomed.
“A potential US government shutdown and US accusations of Chinese hacking fuelled existing market concerns about economic growth,” said Michael McCarthy, chief market strategist at CMC Markets and Stockbroking.
– ‘Well and truly over’ –
Rising tensions between the world’s two largest economies have also unnerved markets, with China hitting back at the US after the Justice Department indicted two alleged Chinese hackers accused of having ties to Beijing’s security services.
US officials said the indictment showed President Xi Jinping had not fulfilled his pledge to stop cybercrime, but it drew a furious response from Beijing, which accused Washington of “fabricating facts”.
The row erupted as the two sides prepare for talks next month to resolve their trade conflict.
Meanwhile US data showed Friday that Trump’s multi-front trade wars are dragging down growth.
“The global rally in stocks seen in the past couple of years is now well and truly over”, said David Cheetham at XTB, noting that London’s FTSE index was seeing its worst December since 2002.
“But the question going forward is whether this is the start of a bear market or simply a pause and period of consolidation,” he said.
Elsewhere Friday, Japanese stocks again bore the brunt of Asian losses, with the Nikkei falling further into bear market territory to hit a fresh 15-month low and regional shares on course for the worst week since October.
Nissan shares slipped 2.04 percent after former chairman Carlos Ghosn faced a fresh allegations that could keep him in detention well into 2019.
– Key figures around 1640 GMT –
London – FTSE 100: UP 0.1 percent at 6,721.17 points (close)
Frankfurt – DAX 30: UP 0.2 percent at 10,633.82 (close)
Paris – CAC 40: FLAT at 4,694.38 (close)
EURO STOXX 50: FLAT at 3,000.61
New York – Dow: UP 0.1 percent at 22,893.17
Tokyo – Nikkei 225: DOWN 1.1 percent at 20,166.19 (close)
Hong Kong – Hang Seng: UP 0.5 percent at 25,753.42 (close)
Shanghai – Composite: DOWN 0.8 percent at 2,516.25 (close)
Euro/dollar: DOWN at $1.1417 from $1.1450 at 2200 GMT
Dollar/yen: DOWN at 111.08 yen from 111.24 yen
Pound/dollar: UP at $1.2675 from $1.2659
Oil – Brent Crude: DOWN 53 cents at $53.82 per barrel
Oil – West Texas Intermediate: UP 2 cents at $45.91