Stocks retreat as investors cash in on rally
AFP – Global stock markets mostly retreated on Monday as investors booked profits after last week’s rally awaiting some key US earnings updates.
Stocks had jumped on Friday, with Wall Street indices ending at fresh record highs, as solid Chinese economic data brightened the economic outlook following an initial US-China trade deal.
“Stocks were in a strong position last week so a bit of a pullback isn’t a high surprise,” noted David Madden, analyst at CMC Markets UK.
“Trading volumes as well as volatility are likely to be low as it is a public holiday in the US.”
Focus is increasingly on the release of corporate earnings, with big US names including Netflix, IBM and Hyundai due to report over the coming days.
Friday’s broadly-healthy data from China provided some reassurance to traders, indicating a growth slowdown in the world’s number two economy may have bottomed out, and suggesting this year could see some improvement.
“We are entering 2020 on a more stable footing with economies globally stabilising and looking like they’re turning up, and the phase one trade deal,” Anne Anderson, of UBS Asset Management, told Bloomberg TV.
“So it’s a bit more positive with regard to the economic fundamentals.”
While the positive sentiment helped Wall Street to chalk up more records Friday, there are worries that the recent upward momentum for equities could slow and gains could trigger some profit-taking soon.
AxiTrader’s Stephen Innes said the general outlook was for further rises.
“There’s a belief that global growth will continue to pick up speed over the coming months, as significant downside risks to the global economy have been turned aside, and worries over a possible recession have diminished,” he said in a client note.
Elsewhere Monday, oil prices rose on supply concerns after exports from Libya, which has been riven by fighting between rival factions since a 2011 NATO-backed uprising, were blocked after a pipeline was shut down by armed forces.
And in Iraq, which is OPEC’s second-biggest producer, a strike at a key oil field hit output. There are also fears that long-simmering tensions could explode into major unrest, with matters not helped by the US killing in the country this month of Iran’s top general.
– Key figures around 1645 GMT –
London – FTSE 100: DOWN 0.3 percent at 7,651.44 points (close)
Frankfurt – DAX 30: UP 0.2 percent at 13,548.94 (close)
Paris – CAC 40: DOWN 0.4 percent at 6,078.54 (close)
EURO STOXX 50: DOWN 0.2 percent at 3,799.03
New York – CLOSED for bank holiday
Tokyo – Nikkei 225: UP 0.2 percent at 24,083.51 (close)
Hong Kong – Hang Seng: DOWN 0.9 percent at 28,795.91 (close)
Shanghai – Composite: UP 0.7 percent at 3,095.79 (close)
Euro/dollar: DOWN at $1.1084 from $1.1092 at 2200 GMT Friday
Pound/dollar: DOWN at $1.2996 from $1.3016
Euro/pound: UP at 85.29 pence from 85.22 pence
Dollar/yen: UP at 110.16 yen from 110.14 yen
Brent Crude: UP 0.6 percent at $65.22 per barrel
West Texas Intermediate: UP 0.3 percent at $58.76 per barrel