World stocks rally fizzles, but oil offers support
NEW YORK, Oct 20 — A global stocks rally stuttered yesterday as dealers mulled Chinese growth numbers, ahead of the final US presidential debate and on the eve of a eurozone interest rate decision.
But rising oil prices — which hit their highest point this year, following a surprise drawdown in US crude stockpiles — kept equities in mildly positive territory, dealers said.
London, Frankfurt and Paris all showed small gains at the close after pulling back from early weakness.
US stocks also finished narrowly positive, boosted by energy and banking shares after strong earnings reports from oil services giant Halliburton and investment bank Morgan Stanley.
After strong gains Tuesday, European equity markets were handed an underwhelming session from Asia, where Shanghai finished flat and Hong Kong dipped, while Tokyo, Sydney and Singapore found higher ground.
New data showed Wednesday that China’s economy grew 6.7 per cent in the third quarter from July-September, compared with a year earlier.
That matched the annual clip from both the first and second quarters, and chimed with expectations. But some China watchers warned that authorities have relied too much on easy credit, which has in turn increased financial risks.
Some analysts also expressed skepticism at what Mike van Dulken, research boss at traders Accendo Markets called “suspiciously stable China GDP growth.”
Markets are watching closely as Democrat Hillary Clinton and her Republican rival Donald Trump wade into their last presidential debate later Wednesday (in US), with the latter sliding in opinion polls amid allegations of sexual misconduct and wild charges of a “rigged” US election.
Dealers will also be keenly following an ECB meeting today after speculation it is considering tapering its vast quantitative easing (QE) stimulus.
Despite the chatter, many analysts expect it to maintain its easing programme and possibly flag fresh measures in December.
Oil prices surge
US oil prices finished at their highest level since July 2015 after the Department of Energy reported that American petroleum stockpiles fell 5.2 million barrels last week.
Among individual stocks, Dow member Intel slumped 5.9 per cent as it projected fourth-quarter sales of US$15.7 billion (RM65.37 billion), below the US$15.9 billion analysts expected. That outlook renewed worries about the chipmaker’s prospects as more consumers turn away from personal computers in favor of smartphones.
In Tokyo, Mitsubishi Motors surged 7.9 per cent following a report by the Nikkei business daily that Nissan chief Carlos Ghosn will become chairman of the embattled carmaker.
In May, Nissan threw Mitsubishi a lifeline as it announced plans to buy a one-third stake in the crisis-hit automaker for about US$2.2 billion, forging an alliance that will challenge some of the world’s biggest auto groups.
The purchase came after Mitsubishi was hit by a mileage-cheating scandal that slammed the brakes on sales.
Key figures at 2100 GMT
New York – Dow: UP 0.2 per cent at 18,202.62 (close)
New York – S&P 500: UP 0.2 per cent at 2,144.29 (close)
New York – Nasdaq Composite: UP 0.1 per cent at 5,246.41 (close)
London – FTSE 100: UP 0.3 per cent at 7,021.92 points (close)
Frankfurt – DAX 30: UP 0.1 per cent at 10,645.68 (close)
Paris – CAC 40: UP 0.3 per cent at 4,520.30 (close)
EURO STOXX 50: UP 0.3 per cent at 3,057.47
Tokyo – Nikkei 225: UP 0.2 per cent at 16,998.91 (close)
Hong Kong – Hang Seng: DOWN 0.4 per cent at 23,304.97 (close)
Shanghai – Composite: UP less 0.1 per cent at 3,084.72 (close)
Euro/dollar: DOWN at US$1.0973 from US$1.0979 Tuesday
Dollar/yen: DOWN at 103.42 yen from 103.87 yen
Pound/dollar: DOWN at US$1.2283 from US$1.2295
Euro/pound: UP at 89.34 pence from 89.29 pence
Oil – West Texas Intermediate: UP US$1.31 at US$51.60 per barrel
Oil – Brent North Sea: UP US$0.99 at US$52.67 — AFP