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25 October 2018
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Financial Markets (The Total Investment & Insurance Solutions)
Stock markets turned higher in European trading Thursday as investors
settled somewhat after steep declines in Asia and the U.S. spurred by worries
over trade and the U.S. economy.
Futures for the Dow Jones Industrial Average
and the Standard & Poor's 500 were higher, suggesting a likely revival of
buying.
Germany's DAX added 0.3 percent to 11,224 and
the CAC 40 in France climbed 1.3 percent to 5,015. Britain's FTSE 100 was flat
at 6,960, underperforming after poor earnings from ad giant WPP.
It was unclear if the gains were a return to
calm or only a respite from the torrent of selling on Wall Street overnight
that spurred a further drop in technology-related shares in Asia.
Japan's Nikkei 225 index swooned 3.7 percent
to 21,268.73. Hong Kong's Hang Seng index ended 1 percent lower at 24,994.46
and Australia's S&P ASX 200 sank 2.8 percent to 5,664.10.
But late in the day, the Shanghai Composite
index erased its early losses to end up only 0.5 points at 2,603.80. Benchmarks
in Thailand and Indonesia also logged gains.
As in New York, Asia's losses were heaviest
for technology companies. Semiconductor maker Tokyo Electron lost 4.3 percent
and Taiwan Semiconductor Manufacturing Co. dropped 4.4 percent. South Korea's
Samsung Electronics sank 3.6 percent and Japanese telecoms and energy giant
Softbank lost 4.4 percent.
Other sectors also felt the pain.
Toyota Motor Corp. gave up 2.7 percent while
Hong Kong-based retail supply chain giant Li & Fung Ltd. lost 1.3 percent.
Also in Hong Kong, airline Cathay Pacific's shares dropped as much as 6.5
percent but ended 3.8 percent lower after it said it had discovered a data
breach affecting 9.4 million passengers.
Still, some market observers were taking the
latest bout of volatility in stride.
"I think the Hong Kong market is really
very close to bottom, because when you look at the value, it's very extremely
cheap. So how low can it get? Maybe it will reach 24,000 before we find the
bottom," said analyst Francis Lun of Geo Securities.
In New York, the futures contract for the
S&P 500 gained 0.7 percent to 2,684 while that for the Dow also rose 0.6
percent, to 24,770, suggesting recent losses may have whetted appetites for
bargains.
The Nasdaq composite, with its hefty roster
of tech stocks, has now fallen more than 10 percent below its August peak in
what Wall Street calls a "correction." Its 4.4 percent tumble on
Wednesday to 7,108.40 was its biggest drop since August 2011 but it is still up
3 percent for the year.
The S&P 500 has lost about 9.4 percent
from its Sept. 20 peak and has given up its gains for the year, as has the Dow.
The Russell 2000 index of smaller-company stocks is down 4.4 percent for the
year.
Disappointing quarterly earnings and outlooks
are stoking investors' worries that Corporate America's tax cut-fueled earnings
growth will fade in coming months as interest rates rise and the trade conflict
with China raises costs.
Recent signs the housing market is cooling
are adding to jitters over prospects for U.S. economic growth.
A shift into less volatile assets has pushed
bond prices higher, sending the yield on the 10-year Treasury note down to 3.13
percent from 3.16 percent late Tuesday.
About 24 percent of the companies in the
S&P 500 had reported third-quarter results as of Wednesday. Of those, 57
percent delivered earnings and revenue results that topped Wall Street's
forecasts.
More reports are due later Thursday in the
U.S., including from Google parent company Alphabet, Amazon.com, Twitter and
Comcast. In Europe, Daimler reported a drop in profits, as it had earlier
warned it would, as did Nokia, which is waiting for global demand for new 5G
networks to pick up.
As selling in stock markets abated, other
markets also regained equilibrium.
Benchmark U.S. crude lost 6 cents to $66.76
per barrel in electronic trading on the New York Mercantile Exchange. On
Wednesday it edged up 0.6 percent Brent crude, used to price international
oils, gained 4 cents to $76.21 a barrel.
The dollar rose to 112.27 yen from 112.23
yen. The euro rose to $1.1406 from $1.1393.The Total Investment & Insurance Solutions
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