Aug 22, 2019: Global stock markets softened Thursday as investors avoided risk on the eve of a speech by Federal Reserve head Jerome Powell, hotly anticipated for clues on the interest rate outlook.
The British pound, meanwhile, gained on optimism that an orderly Brexit may yet be on the cards.
Markets paid little attention to US President Donald Trump providing some fresh hope for China-US trade talks.
Wall Street, which posted healthy gains Wednesday thanks to blockbuster results from retailers, reversed a firm opening trend to trade slightly weaker in the late New York morning.
Minutes published Wednesday from the Fed's July meeting — when it cut rates for the first time since the financial crisis — said policymakers were flexible and borrowing costs were not on a “preset course” despite trade uncertainty and weak global growth.
“Markets remain in wait-and-see mode on Thursday, after the Fed minutes told us nothing we didn't already know,” said analyst Craig Erlam at Oanda.
Next up is Powell's address to the central bankers' symposium at Jackson Hole on Friday.
While the global economy stutters and the China-US trade row rumbles along, markets have found solace in expectations the Fed will continue to lower rates.
The minutes meanwhile made no mention of Trump's attacks on Powell's stewardship of the US central bank.
Investors drew some mild encouragement from a key PMI survey released in Brussels on Thursday pointing to improving services and manufacturing activity in the eurozone.
“Today's PMI developments suggest that the industrial slide might have begun to bottom out, which sustains hopes that, absent any external shock, activity will start to pick up moderately by the end of the year,” said analysts at Oxford Economics.
In commodities, world oil had a rollercoaster day, reversing early gains as the European trading day wore on.
In foreign exchange, the British pound spiked after Prime Minister Boris Johnson met with French President Emmanuel Macron, having held talks with German Chancellor Angela Merkel the day before.
Key figures around 1540 GMT;
- London – FTSE 100: DOWN 1.1 percent at 7,128.18 points (close)
- Frankfurt – DAX 30: DOWN 0.5 percent at 11,747.04 (close)
- Paris – CAC 40: DOWN 0.9 percent at 5,388.25 (close)
- EURO STOXX 50: DOWN 0.7 percent at 3,373.67
- New York – Dow: DOWN 0.1 percent at 26,189.80
- Tokyo – Nikkei 225: UP 0.1 percent at 20,628.01 (close)
- Hong Kong – Hang Seng: DOWN 0.8 percent at 26,048.72 (close)
- Shanghai – Composite: UP 0.1 percent at 2,883.44 (close)
- Euro/dollar: UP at $1.1087 from $1.1085 at 2100 GMT on Wednesday
- Pound/dollar: UP at $1.2241 from $1.2130
- Euro/pound: DOWN at 90.51 pence from 91.39 pence
- Dollar/yen: DOWN at 106.47 yen from 106.62 yen
- Brent North Sea crude: DOWN 39 cents at $59.91 per barrel
- West Texas Intermediate: DOWN 38 cents at $55.30