Stocks Diverge as Traders Close Out Tough Week
Stock markets were mixed Friday after a painful few days as traders tracked Delta variant developments, Chinese regulatory crackdowns, disappointing economic data and brewing geopolitical tensions.
Asia's main indices closed out the week higher while Europe was lower after another tepid overnight lead from Wall Street, which was pulled between better-than-expected US retail sales and an above-forecast reading on jobless claims.
On foreign exchange, the euro rose against the dollar and British pound following a report in the Financial Times that the European Central Bank was on course to hike eurozone interest rates in 2023, an outlook later denied by the ECB.
Rising prices as economies emerge from pandemic lockdowns has triggered expectations that central banks will both taper their huge financial stimulus packages and raise interest rates sooner than expected.
The main focus for investors is now the U.S. Federal Reserve's policy meeting next week and whether it will signal how much and how long it will dial back the vast bond-buying program that has been key to a global economic and equity rally for more than a year.
The Bank of England also meets next week amid annual UK inflation at the highest level in more than nine years.
The Fed will "probably admit they're going to taper, but maybe not taper as much as everybody thought", markets strategist Louis Navellier said.
Eyes are also on the progress of US President Joe Biden's multi-trillion-dollar infrastructure and social spending plans, which are struggling through Congress.
At the same time, lawmakers have yet to agree on raising the debt ceiling -- bring the possibility of a catastrophic US default into play.
That all comes against the backdrop of the highly transmissible Delta Covid mutation, which has sent infections around the world surging and forced several countries to reimpose lockdowns and other containment measures.
Among them is China, where a new outbreak has spooked traders just weeks after officials had appeared to have brought another under control.
The new flare-up has led to concerns that the world's number two economy and key driver of world growth, which was already stuttering, could suffer further.
And while September is considered by analysts to be the weakest month for investing, the past week has been particularly bad for Hong Kong, where tech firms fell on more regulatory oversight and Macau-based casinos were strafed by plans for a government crackdown.
Some of the gambling industry's biggest names -- including Sands and Wynn -- were rocked by Macau government proposals to tighten its grip on the sector, wiping billions of dollars off their values on concerns that a golden era of money-making could be over.
Still, Hong Kong enjoyed gains on Friday, while Tokyo resumed its recent upward trend.
- Key figures around 1045 GMT -
London - FTSE 100: DOWN 0.2 percent at 7,010.89 points
Frankfurt - DAX 30: DOWN 0.3 percent at 15,603.73
Paris - CAC 40: DOWN 0.3 percent at 6,605.87
EURO STOXX 50: DOWN 0.3 percent at 4,156.33
Tokyo - Nikkei 225: UP 0.6 percent at 30,500.05 (close)
Hong Kong - Hang Seng Index: UP 1.0 percent at 24,920.76 (close)
Shanghai - Composite: UP 0.2 percent at 3,613.97 (close)
New York - Dow: DOWN 0.2 percent at 34,751.32 (close)
Euro/dollar: UP at $1.1782 from $1.1773 at 2050 GMT
Pound/dollar: DOWN at $1.3789 from $1.3798
Euro/pound: UP at 85.43 pence from 85.29 pence
Dollar/yen: UP at 109.96 yen from 109.71 yen
Brent North Sea crude: DOWN 0.5 percent at $75.31 per barrel
West Texas Intermediate: DOWN 0.6 percent at $72.16 per barrel
Source: Agence France Presse
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