LONDON: European and Asian stock markets mostly fell Thursday, with analysts warning that this week’s volatility has some time to run.
Data last Friday showing fewer US jobs created in July than expected, plus the spike in the value of the yen after a rate hike last week, sent global equity markets plunging Monday.
Since then there have been rebounds and renewed losses as traders seek to weigh up the risks of recession in the United States, the world’s biggest economy.
London and Paris were down more than one percent in early afternoon deals Thursday after Tokyo closed down 0.7 percent.
The Japanese index had tumbled more than 12 percent Monday before rocketing over 10 percent Tuesday, largely because of wild swings in the yen against the dollar.
Stocks extend recovery, yen slides as volatility grips markets
Wall Street closed down Wednesday as US equities experience their own roller-coast week.
“Global markets remain jittery,” noted AJ Bell investment director Russ Mould.
“There will be concern that a positive start to trading on Wall Street on Wednesday faded fast, with all eyes now turning to today’s session and whether last night was just driven by a few big earnings disappointments or represents the start of a new downtrend,” he added.
Warner Bros. Discovery’s share price plunged more than 10 percent in after-hours trading Wednesday after it reported a quarterly loss of almost $10 billion.
Almost all of the loss was down to a $9.1 billion write-down in the value of the US media giant’s cable network, it announced in a statement, underscoring the challenges facing the legacy television industry.
Weak earnings from Disney, Airbnb and TripAdvisor added to the sense of concern that American consumers were tightening their belts as the impact of elevated inflation and two-decade-high borrowing costs bite.
Federal Reserve boss Jerome Powell last week indicated that the US central bank could cut interest rates at its September meeting, with 25 basis points seen as the likely move.
But traders are now eyeing as many as 50 points, with another 50 possibly before the end of the year, following last weeks jobs data.
The prospect of several reductions has been offset by profit-taking in the tech sector, whose valuation has soared this year on a rush for all things related to artificial intelligence.
In foreign exchange Thursday, the yen rose against the dollar after tumbling Wednesday in reaction to a dovish signal from the Bank of Japan that its recent rate-hikes would not be repeated while markets remained volatile.
Key figures around 1100 GMT
London - FTSE 100: DOWN 1.1 percent at 8,075.36 points
Paris - CAC 40: DOWN 1.1 percent at 7,183.09
Frankfurt - DAX: DOWN 0.8 percent at 17,474.68
Euro STOXX 50: DOWN 1.1 percent at 4,615.21
Tokyo - Nikkei 225: DOWN 0.7 percent at 34,831.15 (close)
Hong Kong - Hang Seng Index: UP 0.1 percent at 16,891.83 (close)
Shanghai - Composite: FLAT at 2,869.90 (close)
New York - Dow: DOWN 0.6 percent at 38,763.45 (close)
Dollar/yen: DOWN at 146.06 yen from 146.83 yen on Wednesday
Euro/dollar: UP at $1.0928 from $1.0925
Pound/dollar: DOWN at $1.2690 from $1.2692
Euro/pound: UP at 86.11 pence from 86.06 pence
West Texas Intermediate: DOWN 0.1 percent at $75.17 per barrel
Brent North Sea Crude: DOWN 0.1 percent at $78.30 per barrel
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