Business

Advertisement

 

Global stocks soften

Agence France-Presse . London | Published: 22:51, Feb 24,2021

 
 

Global stocks were generally weaker Wednesday, with market chatter focused on uncertainty and the risk of a spike in inflation.

In afternoon deals, equities in both London and Paris slipped by 0.2 per cent, while Frankfurt added 0.4 per cent.

In New York, the Dow Jones index was 0.2 per cent lower in early trading as well, and Asian markets closed with losses earlier in the day.

Oil prices climbed beyond the 13-month peaks seen the previous day, and bitcoin rose to over $49,000 after sliding the previous day on negative remarks from US Treasury Secretary Janet Yellen.

 ‘What we are seeing today is reflective of the mood in the markets for more than a week now,’ OANDA analyst Craig Erlam told AFP.

‘It’s been choppy for a number of sessions with investors still uneasy with the developments in the bond market and what it signals’ regarding rising inflation.

‘Powell did a good job of allaying some of those fears yesterday,’ Erlam remarked in reference to comments by US Federal Reserve chairman Jerome Powell to US lawmakers.

Global stock indices have cruised to all-time or multi-year highs in recent months thanks to government and central bank backing, the rollout of vaccines, easing of lockdowns, an imminent US stimulus package and falling infection rates.

Yet the rally is showing signs of fatigue as traders fret that valuations may have run ahead of themselves, while the yield on benchmark 10-year US Treasury bonds — a key red flag on inflation — has spiked.

That has led to worries the Fed will have to lift borrowing costs more quickly than expected, removing a key pillar of support for stocks.

Powell sought to soothe those concerns Tuesday in the first of two congressional testimonies, saying inflation was expected to pick up and be ‘volatile’ this year. while pointing out that the increases were unlikely to be substantial or long-lasting.

In Europe on Wednesday, London’s stocks were capped by the strong pound, which has soared on Britain’s lockdown easing plan, but weighs on the share prices of dollar-earning multinational companies.

Sterling briefly struck $1.4162 in Asian trade — its highest level since April 2018 — while the euro fell at one point to a one-year low at 85.41 pence.

More about:

Want stories like this in your inbox?

Sign up to exclusive daily email

Advertisement

 

Advertisement

images