Shares edge down on global economy uncertainty
Reuters and AFPLONDON/HONG KONG--A smaller than expected rise in German business sentiment in September and growing uncertainty over the strength of the global economy helped nudge world shares lower on Tuesday, while major currencies were trapped in tight ranges.
September 25, 2013, 12:08 am TWN
Germany's Ifo think tank said that its latest reading on business morale showed that the euro zone's biggest economy was on a sustainable growth path after weak start to the year, but that any recovery was likely to be modest.
“The further rise in German Ifo business sentiment confirms that the economy is recovering, but we continue to expect growth to be reasonably sluggish,” said Ben May, a European economist at Capital Economics.
European shares turned negative after the report, trading down 0.1 percent on the day, before edging higher again, while German government bond futures hit a session high, up 33 ticks on the day.
The MSCI global index of shares dipped 0.1 percent after MSCI's broadest index of Asia-Pacific shares outside Japan had earlier eased 0.6 percent, taking its cue from a softer Wall Street.
Shares were also suffering from profit-taking after last Thursday's rallies that were fuelled by the U.S. Federal Reserve's surprise decision to keep its stimulus program unchanged for now.
A similar standoff in 2011 sent global markets slumping and led to the historic downgrade of the U.S. sovereign debt rating.
On Wall Street Monday the Dow fell 0.32 percent and the S&P 500 lost 0.47 percent. The Nasdaq shed 0.25 percent despite a surge in Apple shares after the computer giant said it sold nine million new iPhones over the three-day launch weekend.
Asian markets slipped on Tuesday following losses on Wall Street, as attention turns to a brewing budget row in Washington that threatens to shut down parts of the U.S. economy.
Tokyo edged down 9.81 points to 14,732.61 on its first day of trading after a long weekend, with a slightly stronger yen weighing on exporters. Sydney eased 0.35 percent, or 18.3 points, to 5,234.2 and Seoul lost 0.11 percent, or 2.31 points, to close at 2,007.10.