Global Equity Markets Face Continued Volatility Amid Economic Uncertainties

Equity markets resume drops as volatility persists

European and Asian stock markets mostly fell Thursday, with analysts warning that this week's volatility has some time to run. Data last Friday showing fewer US jobs created in July than expected, plus the spike in the value of the yen after a rate hike last week, sent global equity markets plunging Monday. Since then there have been rebounds and renewed losses as traders seek to weigh up the risks of recession in the United States, the world's biggest economy. London and Paris were down more than one percent in early afternoon deals Thursday after Tokyo closed down 0.7 percent. The Japanese index had tumbled more than 12 percent Monday before rocketing over 10 percent Tuesday, largely because of wild swings in the yen against the dollar. Wall Street closed down Wednesday as US equities experience their own roller-coast week. "Global markets remain jittery," noted AJ Bell investment director Russ Mould. "There will be concern that a positive start to trading on Wall Street on Wednesday faded fast, with all eyes now turning to today's session and whether last night was just driven by a few big earnings disappointments or represents the start of a new downtrend," he added. Warner Bros. Discovery's share price plunged more than 10 percent in after-hours trading Wednesday after it reported a quarterly loss of almost $10 billion. Almost all of the loss was down to a $9.1 billion write-down in the value of the US media giant's cable network, it announced in a statement, underscoring the challenges facing the legacy television industry. Weak earnings from Disney, Airbnb and TripAdvisor added to the sense of concern that American consumers were tightening their belts as the impact of elevated inflation and two-decade-high borrowing costs bite. Federal Reserve boss Jerome Powell last week indicated that the US central bank could cut interest rates at its September meeting, with 25 basis points seen as the likely move. But traders are now eyeing as many as 50 points, with another 50 possibly before the end of the year, following last weeks jobs data. The prospect of several reductions has been offset by profit-taking in the tech sector, whose valuation has soared this year on a rush for all things related to artificial intelligence. In foreign exchange Thursday, the yen rose against the dollar after tumbling Wednesday in reaction to a dovish signal from the Bank of Japan that its recent rate-hikes would not be repeated while markets remained volatile. - Key figures around 1100 GMT - London - FTSE 100: DOWN 1.1 percent at 8,075.36 points Paris - CAC 40: DOWN 1.1 percent at 7,183.09 Frankfurt - DAX: DOWN 0.8 percent at 17,474.68 Euro STOXX 50: DOWN 1.1 percent at 4,615.21 Tokyo - Nikkei 225: DOWN 0.7 percent at 34,831.15 (close) Hong Kong - Hang Seng Index: UP 0.1 percent at 16,891.83 (close) Shanghai - Composite: FLAT at 2,869.90 (close) New York - Dow: DOWN 0.6 percent at 38,763.45 (close) Dollar/yen: DOWN at 146.06 yen from 146.83 yen on Wednesday Euro/dollar: UP at $1.0928 from $1.0925 Pound/dollar: DOWN at $1.2690 from $1.2692 Euro/pound: UP at 86.11 pence from 86.06 pence West Texas Intermediate: DOWN 0.1 percent at $75.17 per barrel Brent North Sea Crude: DOWN 0.1 percent at $78.30 per barrel

Equity markets mixed as nervous traders navigate volatility

Asian stocks were mixed Thursday after a sell-off on Wall Street, with analysts warning the volatility that has roiled markets this week still has some time to run as traders fret over the global economy. Data last Friday showing that fewer US jobs than expected were created in July continues to reverberate as it fanned fears that the world's top economy was heading for recession. While a soft labour market reading would usually have been taken as a positive, giving more ammunition for the Federal Reserve to cut interest rates, investors are beginning to fear it shows the central bank may have waited too long to move. Weak earnings from Disney, Airbnb and TripAdvisor added to the sense of concern that American consumers were tightening their belts as the impact of elevated inflation and two-decade-high borrowing costs bite. Fed boss Jerome Powell last week indicated officials could cut at its September meeting, with 25 basis points seen as the likely move, but traders are now eyeing as many as 50 points, with another 50 possibly before the end of the year. But the prospect of several reductions has been offset by a risk-off mood, which has been exacerbated by profit-taking in the tech sector, which has soared this year on the back of a rush for all things related to artificial intelligence. All three main indexes on Wall Street ended in the red, having given up big gains at the start of the day, with a poorly received US Treasury bond auction adding to the downbeat mood. And Asia followed suit in the morning, having bounced back over the previous two days from Monday's collapse, though some managed to stage a comeback as the day wore on. Hong Kong, Singapore, Manila, Mumbai and Bangkok rose while Shanghai was marginally higher. Tokyo, Sydney, Seoul, Wellington, Taipei and Jakarta were in the red. London, Paris and Frankfurt opened lower. Analyst Stephen Innes warned the rollercoaster ride for markets might not yet be over. "The potential for a broader U.S. economic slowdown, misaligned global monetary policies, and the bubbling geopolitical tensions in the Middle East cast long, ominous shadows across financial markets," he wrote in his Dark Side Of The Boom newsletter. "Furthermore, the US political election looms, potentially turning the markets into more of a chaotic mosh pit than a graceful waltz." However, Rania Gule at XS.com said the losses in Wall Street "might have been mere corrections in a stock market that hit record highs this year, partly due to the hype around artificial intelligence technology, with prices having risen too rapidly and excessively relative to corporate earnings". "The only way stocks might seem less expensive is either through lower prices or increased earnings. With high expectations for earnings growth, this could support a rebound in markets worldwide." The yen edged back up against the dollar after tumbling Wednesday in reaction to a dovish signal from the Bank of Japan that it will not further hike interest rates again -- having lifted last week for the first time in 17 years -- while markets remain volatile. The BoJ's decision to hike rates last week, hours before the Fed hinted at its September cut, sent the Japanese unit surging, just weeks after it hit a nearly four-decade low. Analysts said the move had sparked a massive reversal of the "carry trade" in which traders took advantage of the weaker currency to buy higher-yielding assets such as equities. Still, Stefan Angrick at Moody's Analytics saw the BoJ sticking to its monetary tightening. "We and the consensus now expect the BoJ to hike rates once more this year and again next year, which will lead to further yen appreciation and lower prices for Japanese equities," he told AFP. "Yen trading still looks a bit speculative, but that should fade as rates in Japan go up while rates in the US go down. "Although we don't expect the BoJ to change course, it's a distinct possibility. The BoJ was forced to reverse course after past rate hikes, so it wouldn't be the first time." - Key figures around 0710 GMT - Tokyo - Nikkei 225: DOWN 0.7 percent at 34,831.15 (close) Hong Kong - Hang Seng Index: UP 0.4 percent at 16,941.90 Shanghai - Composite: FLAT at 2,869.90 (close) London - FTSE 100: DOWN 0.9 percent at 8,097.13 Dollar/yen: DOWN at 146.17 yen from 146.83 yen on Wednesday Euro/dollar: UP at $1.0940 from $1.0925 Pound/dollar: UP at $1.27. 05 from $1.2692 Euro/pound: UP at 86.09 pence from 86.06 pence West Texas Intermediate: DOWN 0.1 percent at $75.17 per barrel Brent North Sea Crude: DOWN 0.2 percent at $78.13 per barrel New York - Dow: DOWN 0.6 percent at 38,763.45 (close)