A journalist poses while looking at a computer screen with the Bloomberg display showing a rise in the value of the pound sterling against the US dollar in London on October 17, 2019 with a spike at the moment of the announcement of a draft Brexit deal. - Sterling surged within a whisker of $1.3 on October 17, 2019, striking five-month peaks as the European Union reached a draft Brexit withdrawal deal with London. (Photo by DANIEL SORABJI / AFP)
Stock markets mostly fell on Wednesday as investors struggled to find a traditional “Santa Claus rally” in the final days of the year.
The “Santa Claus rally” is a seven-session stretch over Christmas and New Year that typically sees stocks drifting higher amid light trading volumes.
London’s FTSE 100, back after a four-day Christmas break, finished 0.3 percent higher than its Friday close, but most other major markets fell.
“Checking in on Santa Claus, he hasn’t left the building but he seems somewhat stuck in a revolving door,” said Briefing.com analyst Patrick O’Hare.
After rising at the open, Wall Street stocks fell as US Treasury yields — a proxy for Federal Reserve interest rates — rose again.
Investors have been fretting about the risk of recession as central banks have been raising interest rates in efforts to curb inflation. Higher borrowing costs lead to slower economic activity.
“There isn’t much confidence or appetite for riskier assets among investors and traders,” Naeem Aslam, chief market analyst at Avatrade, told AFP.
“We are most likely to see this trend continue with very little volume in the market,” Aslam said.
China’s moves to reopen also revived inflation worries.
Beijing has abruptly reversed tight pandemic curbs that kept the world’s second-largest economy isolated since 2020.
On Monday, Beijing announced it was ending quarantine measures for overseas arrivals from January 8, the latest move to loosen its zero-Covid regime, after it dropped mandatory testing and lockdowns earlier this month.
China’s scrapping of curbs has spurred hopes for its economic revival.
“The good news is that inflation subsides as China reprises its role as a supplier of low-cost goods globally and supply chain bottlenecks ease,” said analyst Stephen Innes of SPI Asset Management.
However, he also warned that China’s accelerating demand would push up prices for commodities, in turn further fuelling global inflation.
Meanwhile, Hong Kong stocks jumped as investors digested the Covid news from Beijing on the first trading day after the Christmas break.
Hong Kong chief executive John Lee also announced a further easing of the city’s remaining Covid measures.
Elsewhere, oil prices fell as traders weighed the potential impact of China’s reopening and Russia’s crude export ban against buyers that apply a price cap imposed by Western nations.
New York – Dow: DOWN 0.5 percent at 33,060.85 points
EURO STOXX 50: DOWN 0.6 percent at 3,808.82
London – FTSE 100: UP 0.3 percent at 7,497.19 (close)
Frankfurt – DAX: DOWN 0.5 percent at 13,925.60 (close)
Paris – CAC 40: DOWN 0.6 percent at 6,510.49 (close)
Tokyo – Nikkei 225: DOWN 0.4 percent at 26,340.50 (close)
Hong Kong – Hang Seng Index: UP 1.6 percent at 19,898.91 (close)
Shanghai – Composite: DOWN 0.3 percent at 3,087.40 (close)
Euro/dollar: DOWN at $1.0624 from $1.0640 on Tuesday
Pound/dollar: UP at $1.2036 from $1.2025
Euro/pound: DOWN at 88.28 pence from 88.48 pence
Dollar/yen: UP at 134.23 yen from 133.49 yen
West Texas Intermediate: DOWN 1.7 percent at $78.17 per barrel
Brent North Sea crude: DOWN 1.6 percent at $83.31 per barrel
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