World stocks lower
MOSCOW – World stocks edged lower on Friday, a day after markets around the world dropped sharply on concerns global growth is slowing and the Federal Reserve could start scaling back its monetary stimulus.
Japan’s Nikkei, which had led the previous day’s losses with a plunge of over seven per cent, seesawed throughout Friday before closing 0.9 per cent higher at 14,612.45.
In Europe, stocks closed lower Friday following modest gains in the morning. Britain’s FTSE 100 shed 0.6 per cent 6,654 points while France’s CAC-40 declined 0.3 per cent at 3,956.
Germany’s DAX followed suit, dropping 0.6 per cent to 8,305 despite upbeat economic indicators. The Ifo index of business confidence and the GfK survey of consumer optimism both rose, according to surveys released on Friday, suggesting Europe’s largest economy will pick up in the second quarter.
Analysts said traders are mainly looking for more clues on what policymakers in Europe and the US will do to support economic growth.
“The market will likely stabilize as investors wait for more clarity on the data front to gauge the next policy moves,” Anthony Lam at Credit Agricole said in a morning note to investors.
Wall Street was muted on opening in spite of latest figures from the Commerce Department showing an increase of 3.3 per cent in durable goods orders for April from the previous month.
The Dow Jones industrial average dropped 0.2 per cent to 15,270 while the broader S&P 500 slipped 0.3 per cent to 1,645.
Trading volumes are likely to be somewhat limited on Friday as investors in the US and Britain prepare for a long holiday weekend, with their markets to remain closed on Monday.
The previous day’s market drops had been triggered in part by the suggestion that Federal Reserve might start easing its bond-buying program soon. The Fed is buying US$85 billion worth of bonds every month as part of its stimulus program. That has kept interest rates low and encouraged investors to put money into stocks and other risky assets. If the Fed slows down its bond purchases, it could lead to an outpouring of money from stocks, investors fear.