LONDON (Businesshala) – The stock market slid on Friday but captured most of last session’s gains as investors welcomed the US Senate’s temporary lifting of debt limits and waited for important jobs data later.
Thursday’s rally lifted global stock indices into positive territory for the week, despite a broad sell-off at the start as investors worried about rising energy prices and the prospects of a faster-than-expected interest rate hike to tackle inflation. .
Still, the mood remains nervous – oil prices returned to multi-year highs and government bond yields climbed early Friday.
By 1115 GMT, the EUR STOXX 50 was down 0.23%, while the German DAX dropped 0.12%. Britain’s FTSE 100 remained unchanged.
The MSCI World Equity Index, which tracks stocks in 50 countries, was up 0.06% and is now up 0.8% for the week. But the index is up more than 4% from its record high in early September.
Graphic: World Stock
Wall Street futures pointed to a small gain in the open.
“There’s a lot of liquidity and there’s no stock options, so every time there’s a pullback, the buy-the-dip starts. The can-kicking by Congress on the debt cap added a little bit of bounce to that,” said Kleinwort Hambros. CIO Fahad Kamal said.
The US Senate’s approval by the US Senate to temporarily raise the federal government’s debt limit and avoid the risk of historic defaults supported the risk sentiment, although it postponed a decision on a longer-term measure until early December. slap down.
The vote triggered a sell-off in US government bonds, and 10-year US Treasury yields rose to 1.6%, the highest level since June when they touched similar levels.
Traders are also awaiting US payroll data for September. They say anything but a significant surprise in employment data the Federal Reserve will signal at its November meeting when it begins to ease its massive stimulus program.
According to a Businesshala survey of economists, there is an increase of 500,000 jobs in non-farm payrolls last month, which will drop the employment level of about 4.8 million jobs from its peak in February 2020.
Deutsche Bank strategist Jim Reid said that “markets have stirred but not completely shaken this week”.
He added that the rebound was “thanks to a near-term resolution on the US debt limit along with a reduction in gas prices, which took out two of the most prominent risks for investors over the past few weeks.”
In Asia, the main stock benchmark was supported by advances in Chinese blue chips, which rose 1.31% as trading resumed after the week-long National Day holiday. The recovery sentiment partly stemmed from a private sector survey that showed China’s services sector activity picked up in September.
Over the past three months, Chinese stocks have been hit by regulatory clampdowns, turmoil in the property sector related to China Evergrande and its huge debt, and the recent power crunch, but some investors are now seeing a buying opportunity. Is.
However, bonds and shares issued by Chinese property firms fell on Friday, showing no signs of resolving the cash-strapped Evergrande’s debt problems, affecting sentiment in the broader sector.
The US dollar index was slightly up at 94.161, but not far from its 12-month high of 94.504 at the end of September.
Some industries have begun to switch from high-priced gas to oil and, on suspicion that the US government will release oil from its strategic reserves for now, fueled oil prices.
Brent crude rose 0.71% to $82.53 a barrel, down from the day’s high, but still held close to a three-year high of $83.47 from earlier in the week. US crude rose 0.72% to $78.88 a barrel, hitting its seven-year high of $79.78 this week. [O/R]