Doubts over Syria pull European stocks down
AP and AFPPARIS/HONG KONG -- Uncertainty over a Syrian military intervention and a continued high unemployment rate drove European markets down on Friday.
August 31, 2013, 12:03 am TWN
On Thursday, lawmakers in the U.K. refused to authorize a British military intervention in Syria after an alleged chemical weapons attack near Damascus killed more than 300 civilians earlier this month. The surprise no-vote — which came after momentum seemed to be building inexorably toward military action — left uncertainty as to whether the U.S. and France would go ahead.
In morning trading in Europe, France's CAC-40 fell 0.5 percent to 3,968, while the DAX in Germany pulled back 0.6 percent 8,146. The FTSE index of leading British shares dropped 0.4 percent to 6,455.
Part of those declines were due to the release of data that showed the unemployment rate across the 17 nations using the euro stuck at its record high of 12.1 percent in July. The European Union rate of 11 percent also held steady.
Wall Street, meanwhile, looked set for a stronger open. Dow Jones industrial futures were up slightly 0.1 percent to 14,856, while futures in the broader S&P 500 were 0.2 percent to 1,640.
Asian markets mostly rose on Friday following upbeat U.S. economic growth data and easing concerns about an imminent strike on Syria although gains were capped by mild profit-taking following the previous day's gains.
The quiet trade brought an end to a torrid month for global shares and currencies dominated by fears over the end of the U.S. Federal Reserve's stimulus program as well as the possibility of military action in the Middle East.
Tokyo eased 0.53 percent, giving up 70.85 points to end at 13,388.86 but Sydney added 0.84 percent, or 42.60 points, to 5,135.00, while Seoul was 0.99 percent higher, adding 18.82 points to 1,926.36.
Shanghai ended flat, edging up 1.16 points to 2,098.38, while Hong Kong closed up 0.12 percent, or 26.59 points at 21,731.37.
Manila ended up 2.20 percent, adding 130.96 points to 6,075.17 after strong economic growth figures on Thursday.
Investors were a little more buoyant as the likelihood of a US-led attack on Syria looked less imminent after lawmakers in London voted against such a move.
And while the White House signaled it was ready to go it alone in punishing Syria for an alleged chemical attack on its civilians, analysts said they did not expect a strike this weekend, as was initially thought possible.
“There just seems to be less urgency about an attack any time soon,” said Alec Young, global equity strategist for S&P Capital IQ. “The stress level has come down a little.”
Expectations of a military strike against Syria sent shares diving this week as it fuelled concerns that a wider conflict was looming in the oil-rich region.
Emerging markets have been hammered this month as dealers bet on the Fed winding down its bond-buying stimulus, which has helped fuel an investment splurge in developing economies over the past year.
Among the worst hit markets have been Manila, which has lost 10.5 percent this year, while Jakarta has fallen 11 percent and Bangkok 9.2 percent.