Wall Street, stronger US dollar weigh on stocks worldwide
ALBAWABA – Stocks worldwide mostly fell on Thursday as a stronger US dollar and higher United States (US) treasury yields drew investments away from risk markets, amid surging oil prices.
News agencies reported a phenomenal surge in both oil prices and the US dollar, contrary to the usual trend, driving action away from equity markets.
The risk-off mood on trading floors summed up the generally gloomy sentiment seen through most of September, Agence France-Presse (AFP) reported.
Meanwhile, stubborn inflation is putting pressure on major central banks to hike interest rates or keep them higher for longer.
Notably, higher interest rates mean higher yields on bonds and treasuries, which is seen as a low-risk investment instrument when uncertainty strikes the more rewarding, riskier equities market.
"It's clear now that markets see higher long-term yields in the US for a longer period. That's the main driver for the dollar here," ] Dane Cekov, senior FX strategist at Nordea, told AFP.
Equity markets in Asia were mixed following a weak lead from Wall Street, with Tokyo, Hong Kong, Sydney, Mumbai, Bangkok and Wellington all down.
Shanghai, Singapore, Taipei and Manila edged up, as London dipped Thursday morning, and Frankfurt and Paris rose, according to AFP.
Traders deal in mixed bag of stocks worldwide
Traders in Hong Kong were again on edge after China’s Evergrande suspended trade in its shares, as well as those of its electric vehicle and property services units, without giving an explanation. Notably, the company’s stocks were on a downward trajectory for the better part of a week.
Stocks worldwide are anchored by sluggish movements in financial centers such as Wall Street and London - Shutterstock
The MSCI index of global equities moved a fraction lower and could notch its 10th straight daily fall on Thursday, equivalent to a long losing streak from 2021, Reuters reported.
MSCI's index of Asia-Pacific shares outside Japan was pinned near a 10-month low, as US and European futures fluctuated either side of flat.
Japan's Nikkei fell 1.8 percent, with investors selling stocks that went ex-dividend.
In Europe, the Stoxx 600 opened flat and US futures posted small moves, according to Bloomberg.
Stocks worldwide also face the risk of further selling linked to a large options position held by a JPMorgan Chase & Co. equity fund, Bloomberg reported. Tens of thousands of protective put contracts held by the fund will expire Friday at a strike price not far below the current level of the S&P 500, creating the potential for market dislocations.
Socks worldwide: Market summary by AFP and Bloomberg
The Stoxx Europe 600 rose 0.1 percent as of 8:01 a.m. London time
S&P 500 futures were little changed
Nasdaq 100 futures were little changed
Futures on the Dow Jones Industrial Average were little changed
The MSCI Asia Pacific Index fell 0.8 percent
The MSCI Emerging Markets Index fell 0.4 percent
Tokyo - Nikkei 225: DOWN 1.5 percent at 31,872.52 (close)
Hong Kong - Hang Seng Index: DOWN 1.4 percent at 17,373.03 (close)
Shanghai - Composite: UP 0.1 percent at 3,110.48 (close)
London - FTSE 100: DOWN 0.1 percent at 7,588.01
New York - Dow: DOWN 0.2 percent at 33,550.27 (close)
