Global Stocks Fall as China Halts Europe's Rally
November 27 2015 - 5:10AM
Dow Jones News
Global stocks fell Friday, as a steep drop in Chinese equities
put a halt to Europe's rally.
The Stoxx Europe 600 was down 0.5% in early trade, weighed by
losses in the basic resources sector, after hitting a three-month
high on Thursday.
"China spooked markets quite a bit over the summer and now we
see it again," said Philippe Gijsels, chief strategist at BNP
Paribas Fortis, pointing to weakness in the Chinese manufacturing
sector.
Asian markets sold off as investigations into two major Chinese
brokerages and a drop in Chinese industrial profits sent the
Shanghai Composite Index down 5.5%.
Hong Kong's Hang Seng Index lost 1.8%, while Japan's Nikkei
Stock Average fell 0.3%.
U.S. financial markets were closed Thursday for the Thanksgiving
Holiday and will close early on Friday in what is expected to be a
light trading session.
In currencies, the euro was up 0.06% against the dollar at
$1.0613.
The dollar was down 0.16% against the yen at ¥ 122.4270 after
another fall in Japanese consumer prices raised hopes for more
stimulus from the Bank of Japan.
In commodities, Brent crude oil was down 0.6% at $45.17 a
barrel.
Gold was down 0.3% at $1,067 an ounce.
The week has seen sharp swings for European bourses. A selloff
sparked by mounting geopolitical tensions gave way to gains as
investors looked forward to further easing of monetary policy from
the European Central Bank at its meeting on Dec. 3.
"People who missed the rally last year [following Mario Draghi's
stimulus measures] don't want to miss it now," Mr. Gijsels said.
"Despite all the economic worries from China, and geopolitical
worries in Europe and elsewhere, I think the central bank is still
very much the most important driver of the market. If Draghi wants
the market to go up [next week], it will."
Meanwhile, the Federal Reserve's plans for interest rates
continue to steer markets. "While the run-up to the Fed's interest
rate setting meeting in mid-December could see more volatility in
share markets, it's starting to look like investors are becoming
less worried about it and that a Fed hike will actually be a vote
of confidence in the U.S. economy," Shane Oliver, head of
investment strategy at AMP Capital, wrote in a note.
Next week, investors could get more clues into the Fed's plans
with the release of the monthly payrolls report and congressional
testimony from Chairwoman Janet Yellen.
Write to Riva Gold at riva.gold@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
November 27, 2015 04:55 ET (09:55 GMT)
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