Markets steady despite 2.75% slide in Nikkei
AP and AFPLONDON/HONG KONG -- Financial markets outside of Japan were lackluster Friday at the end of a week that's seen the S&P 500 index post a series of record highs and the dollar fall to near two-year lows against the euro.
October 26, 2013, 12:04 am TWN
In Europe, the FTSE 100 index of leading British shares was up 0.1 percent at 6,716, little affected by news that the British economy grew at a quarterly rate of 0.8 percent in the third quarter. Though that was the highest quarterly rate for over 3 years, it was in line with expectations.
Elsewhere in Europe, Germany's DAX was 0.1 percent lower at 8,975. It too was largely unaffected by a slight weakening in the Ifo survey of German business confidence. More important for the DAX's near-term performance could be whether it manages to break above 9,000 for the first time. The CAC-40 in France was 0.3 percent lower at 4,264.
Wall Street was poised for a steady opening, with Dow futures unchanged and the broader S&P 500 futures 0.1 percent lower.
Now that the uncertainty over the raising of the U.S. debt ceiling has been resolved, albeit only until early next year, investors have focused on other matters, notably when the Federal Reserve will start to reduce its monetary stimulus.
Figures this week — some of which were delayed by the partial government shutdown in the U.S. — have reinforced expectations that so-called “tapering” won't begin until next year. In particular, worse than expected payrolls figures for September helped shore up confidence in stock markets and sent the dollar skidding — the Fed's stimulus effectively creates more dollars, which are then recycled in financial markets.
In Asia, markets slipped Friday, despite a positive lead from Wall Street after a mixed bag of earnings reports, as the strong yen dragged down Japanese stocks.
Upbeat consumer prices data from Japan — excluding fuel costs and volatile fresh food prices — showed an on-year rise for the fourth consecutive month in September.
But it failed to lift sentiment amid ongoing concerns over whether the government's much-touted “Abenomics” growth-blitz will reverse two decades of stagnant growth and falling prices.
“We certainly get the sense that the market enthusiasm over 'Abenomics' is waning,” said Derek Halpenny, an analyst at Bank of Tokyo-Mitsubishi UFJ.
Tokyo tumbled 2.75 percent or 398.22 points to 14,088.19, while Seoul slipped 0.6 percent or 12.30 points to 2,034.39. Sydney bucked the regional trend by adding 0.25 percent or 13.4 points to finish at 5,386.3.
Shanghai ended down 1.45 percent or 31.36 points to 2,132.96, and Hong Kong fell 0.6 percent or 137.48 points to 22,698.34.