Aug 17, 2019: Global stock markets rose on Friday as investors put economic growth fears and trade jitters to one side, deciding that they had had enough drama and losses for one week.
“We're ending a turbulent week on a more positive note as exhausted traders the world over head into the weekend in a more buoyant mood,” said Craig Erlam, senior market analyst at the Oanda trading group.
Equities have had a volatile five days, during which US-China trade talk hopes came and went and economic data pointed to a possible worldwide downturn.
The Dow on Wednesday suffered its worst one-day fall of the year, before recovering slightly on Thursday, reassured by strong US retail sales and Walmart earnings.
On Friday, it continued to recover throughout the New York morning as investors found relief in hope for progress in the US-China trade war, and housing data offered enough good news not to ruin the party.
– The spooky yield curve –
The week's most nerve-wracking event was a so-called inversion of the yield curve in the US debt market that Erlam said “has spooked a lot of people this week”.
The yield on the 10-year US Treasury bond slid Wednesday below the yield on the two-year note, meaning short-term interest rates were higher than longer-term ones.
The so-called “inversion” phenomenon is viewed by markets as a reliable harbinger of recession.
Economists have warned for months that trade tensions would drag down sentiment, which was already suffering owing to China's economic slowdown and fears of Brexit's impact on Britain and Europe.
The tensions have hit global demand with data this week showing China's industrial output had plummeted to a 17-year low. Pro-democracy protests in Hong Kong were adding to the negative sentiment.
– Pound creeps higher –
Cathay Pacific on Friday announced the shock resignation of its chief executive Rupert Hogg, days after the Hong Kong carrier was censured by Beijing because some staff had supported pro-democracy protests in the city.
Paul Loo, Cathay's chief customer and commercial officer, also resigned.
Until recently Cathay had been celebrating a turnaround in fortunes after Hogg initiated a three-year cost cutting programme.
Elsewhere Friday, the opening of London's benchmark FTSE 100 shares was delayed nearly two hours by a software problem, the London Stock Exchange said.
“London Stock Exchange experienced a technical software issue this morning that affected trading in certain securities, including FTSE 100 and (second-tier) FTSE 250 stocks,” said a statement.
The pound meanwhile continued its recovery, “aided by a series of better-than-expected (UK) economic releases in recent days”, helping to offset Brexit uncertainty, according to David Cheetham, chief market analyst at XTB trading group.
The euro recaptured some of its early losses against the dollar after magazine Der Spiegel said that the German government was ready to boost public spending to head off any coming recession.
– Key figures around 1540 GMT –
- London – FTSE 100: UP 0.7 percent at 7,117.15 points (close)
- Frankfurt – DAX 30: UP 1.3 percent at 11,562.74 (close)
- Paris – CAC 40: UP 1.2 percent at 5,300.79 (close)
- EURO STOXX 50: UP 1.4 percent at 3,328.32
- New York – Dow: UP 1.1 percent at 25,855.09
- Tokyo – Nikkei 225: FLAT at 20,418.81 (close)
- Hong Kong – Hang Seng: UP 0.9 percent at 25,734.22 (close)
- Shanghai – Composite: UP 0.3 percent at 2,823.82 (close)
- Euro/dollar: DOWN at $1.1096 from $1.1107 at 2100 GMT
- Pound/dollar: UP at $1.2147 from $1.2084
- Euro/pound: DOWN at 91.35 pence from 91.84 pence
- Dollar/yen: UP at 106.33 yen from 106.10 yen
- Brent North Sea crude: UP 32 cents at $58.55 per barrel
- West Texas Intermediate: UP 7 cents at $54.54