London (AFP) – Major stock markets mostly rallied and oil prices retreated Thursday on hopes for an end to the war in Ukraine, despite fresh tariff threats. London was a rare faller owing to sharp losses in share prices of big companies, including Unilever, Barclays, and British American Tobacco, due to mixed earnings. This development overshadowed news that the UK economy surprisingly grew in late 2024.
US President Donald Trump’s talks with Russian leader Vladimir Putin to start negotiating an end to the war in Ukraine “has fostered a risk-on attitude among investors,” said Naeem Aslam, chief investment officer at Zaye Capital Markets. The positive showing “is a result of the potential reduction in geopolitical risks,” he added. With Russia being a major producer of oil, crude futures fell heavily on easing supply concerns, while the dollar lost some of its safe-haven support.
The developments surrounding Ukraine helped ease fears over high US inflation—a situation that risks worsening because of Trump’s tariffs, according to analysts. “Tariffs and inflation remain the only two themes that investors care about,” said Chris Beauchamp, chief market analyst at the online trading platform IG. “Despite stronger CPI and PPI readings, stocks have avoided a selloff, with US markets demonstrating remarkable resilience,” he added.
Data released Wednesday showed annual consumer inflation (CPI) rose to three percent in January, while wholesale inflation data (PPI) also came in hotter than expected. This data dealt a blow to hopes that the US Federal Reserve would continue to lower rates this year, having cut three times in 2024, with traders now pricing in just one cut. The figures came after Fed chief Jerome Powell warned on Tuesday that policymakers were in no hurry to loosen monetary policy further. “In our view, the bottom line is clear: the Fed has no reason to cut further. Inflation seems to be stuck above target,” wrote analysts at BoA Global Research.
Meanwhile, Trump’s announcement that he plans to unveil further tariffs on Thursday failed to spook markets, with IG’s Beauchamp noting that they won’t go into force until the beginning of April. “Investors have been strengthened in their belief that the tough talk on this front is more of a negotiating tactic,” he said. Among individual stocks, Nestle surged more than six percent in Zurich after the Swiss food giant posted better-than-expected annual sales.
**Key figures around 1630 GMT:**
New York – Dow: UP 0.4 percent at 44,529.33 points
New York – S&P 500: UP 0.6 percent at 6,089.57
New York – Nasdaq Composite: UP 1.0 percent at 19,851.00
London – FTSE 100: DOWN 0.5 percent at 8,764.72 (close)
Paris – CAC 40: UP 1.5 percent at 8,164.11 (close)
Frankfurt – DAX: UP 2.1 percent at 22,612.02 (close)
Tokyo – Nikkei 225: UP 1.3 percent at 39,461.47 (close)
Hong Kong – Hang Seng Index: DOWN 0.2 percent at 21,814.37 (close)
Shanghai – Composite: DOWN 0.4 percent at 3,332.48 (close)
Euro/dollar: UP at $1.0443 from $1.0387 on Wednesday
Pound/dollar: UP at $1.2537 from $1.2446
Dollar/yen: DOWN at 153.03 yen from 154.39 yen
Euro/pound: DOWN at 83.31 pence from 83.40 pence
West Texas Intermediate: DOWN 0.4 percent at $71.06 per barrel
Brent North Sea Crude: DOWN 0.6 percent at $74.76 per barrel
© 2024 AFP
