London (AFP) – Stock markets and oil prices retreated Tuesday, weighed down by China’s struggling economy according to analysts. Brent North Sea crude shed more than two percent, as European and Asian equities slid. A stream of indicators, including the latest on manufacturing, has highlighted weakness in the Chinese economy, the world’s second largest after the United States.
China’s “only plan for recovery seems to be in exporting its way out of economic doldrums,” noted John Evans, analyst at oil broker PVM. “Yet external demand flounders in the face of a global economy that on the whole is sputtering at best.” Traders were awaiting US manufacturing figures Tuesday ahead of key American jobs data on Friday, hoping for a clearer picture on the pace of US interest-rate cuts set to begin this month. Wall Street reopens Tuesday after a long holiday weekend in the US.
In foreign exchange, the yen strengthened after Bank of Japan chief Kazuo Ueda restated his intention to lift interest rates again if inflation and the economy meet its forecasts. The bank’s surprise decision to hike in July, hours before the Federal Reserve indicated it was ready to begin cutting US borrowing costs, sparked a massive unwind of the so-called “yen carry trade” in which investors used the cheap currency to buy high yielding assets like stocks.
In company news on Tuesday, shares in Cathay Pacific slipped as the Hong Kong carrier said that 15 of its Airbus A350 jets needed new engine parts after inspecting its entire fleet, which was grounded following a “first of its type” engine component failure. British engine manufacturer Rolls-Royce on Tuesday confirmed that its Trent XWB-97 engines powered the planes, helping its shares recover slightly after starting the week with a 6.5-percent drop.
– Key figures around 1115 GMT –
London – FTSE 100: DOWN 0.5 percent at 8,324.36 points
Paris – CAC 40: DOWN 0.2 percent at 7,628.17
Frankfurt – DAX: DOWN 0.4 percent at 18,855.38
EURO STOXX 50: DOWN 0.5 percent at 4,950.76
Tokyo – Nikkei 225: FLAT at 38,686.31 (close)
Hong Kong – Hang Seng Index: DOWN 0.2 percent at 17,651.49 (close)
Shanghai – Composite: DOWN 0.3 percent at 2,802.98 (close)
New York – Dow: Closed Monday for public holiday
Brent North Sea Crude: DOWN 2.5 percent at $75.61 per barrel
West Texas Intermediate: DOWN 2.0 percent at $72.12 per barrel
Dollar/yen: DOWN at 145.90 yen from 147.01 yen on Monday
Euro/dollar: DOWN at $1.1039 from $1.1067
Pound/dollar: DOWN at $1.3124 from $1.3147
Euro/pound: DOWN at 84.13 pence from 84.18 pence
© 2024 AFP
