TEHRAN, October 31 -Stock markets bounced on Wednesday, bringing some relief after a brutal October in which equities have suffered one of their worst drops in a decade and spooked investors.
TEHRAN, Young Journalists Club (YJC) -Stock markets bounced on Wednesday, bringing some relief after a brutal October in which equities have suffered one of their worst drops in a decade and spooked investors.
Sino-U.S. trade tensions, concerns about the global economy and higher U.S. interest rates and fears that corporate earnings’ growth is peaking have combined to shake financial markets this month, leaving most major markets in negative territory for the year.
That has spurred predictions that an almost decade-long bull-market has run its course.
Data overnight showing that China’s factory growth slowed to its lowest in two years has reinforced worries about weakening growth stemming from the trade conflict with the United States. That followed disappointing euro zone growth data published on Tuesday.
Investors rushed into the dollar, sending it to a 16-month high while the offshore Chinese yuan languished at a 22-month low.
A batch of positive earnings set a firmer tone for European stocks on Wednesday, though pan-European indexes are still headed for their weakest month since August 2015.
The leading euro zone stock index was up 1.7 percent in early trading, with the pan-European STOXX 600 up 1.7 percent and Germany’s DAX up 1.5 percent. Britain’s FTSE 100 increased 1.6 percent.
They tracked gains in Asia, where the MSCI’s broadest index of Asia-Pacific shares outside Japan rose 1.5 percent, bringing month-to-date losses to 10.6 percent.
Wall Street was indicated higher at the open, with the S&P 500 e-mini futures 0.7 percent ahead.
The MSCI world equity index, which tracks shares in 47 countries, rose 0.6 percent but remains down 8.2 percent in October, its worst month since 2012.
The index is down 13 percent from all-time highs hit in January.
“Ultimately I’m still of the belief that we are in for more downside and rallies are for selling, but squeezes in bear markets are not normally comfortable affairs,” said Neil Campling, co-head of the global thematic group at Mirabaud Securities.
“I think a 2-3 day battle toward the top of the downtrend. Then we can return to the bigger picture - the mid-terms (U.S. elections), trade wars, rates etc. once a few shorts have been taken out of the tape.”
Concerns over growth in Asia and the euro zone come as the U.S. economy continues to look in healthier shape, spurring fresh demand for the dollar.
Source: Reuters
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