World stock markets recover on tech sector bounce

Agence France-Presse

Posted at Nov 22 2018 08:15 AM

Santa Claus pays a visit on the floor at the New York Stock Exchange in New York, US, Nov. 21, 2018. Brendan Mcdermid, Reuters/File

NEW YORK -- Stock markets enjoyed a rebound on Wednesday as the technology sector ended a 2-day hemorrhage, although analysts said the respite might be temporary.

Oil prices also recovered after their recent rout despite warnings of slower global economic growth.

"The tech sector and auto companies are currently leading the equity advance," said Dean Popplewell at Oanda. "The bleeding seems to have temporarily stopped."

The rebound came a day after stock markets plunged as a beating for the technology sector helped wipe out all of this year's gains on Wall Street's Dow index.

"A broad basket of European shares fell to their lowest level since early 2017 yesterday and while we have seen a bounce ... the markets remain susceptible to further declines going forward," said David Cheetham, chief market analyst at XTB trading group.

Milan's stock market held onto gains and the euro climbed versus the dollar after the EU, as expected, officially rejected Italy's big-spending budget, clearing the path for unprecedented sanctions and deepening a bitter row with Rome's populist government. 

Analysts at Charles Schwab attributed positive sentiment across Europe's banking sector to shifting sentiment "as it looked that Italy could eventually reach an accommodation with the European Union, though the Italian government denied it may be open to budget negotiations."

The Organization for Economic Cooperation and Development meanwhile warned the world economy had peaked and faced a slowdown driven by international trade tensions and tighter monetary conditions.

OIL RECOVERS

In commodities trading, oil recovered from a slump of more than 6 percent, with traders fretting that Saudi Arabia might not deliver on planned production cuts.

US President Donald Trump thanked Saudi Arabia on Twitter for the pullback in oil prices. The praise came a day after the US president dismissed evidence that Saudi Crown Prince Mohammed bin Salman was involved in the murder of journalist Jamal Khashoggi in a statement that drew harsh criticism from supporters of a free press.

Crude prices have fallen by almost 30 percent from four-year highs touched at the start of October. Oil analysts attribute the pullback to high supply as well as a weakening global growth outlook.

In company news meanwhile, shares in French car giant Renault gained after shedding more than nine percent over two days, triggered by the arrest of chief executive Carlos Ghosn.

Japanese authorities on Wednesday extended by 10 days the detention of Ghosn, who is also chairman of Nissan, over allegations of financial misconduct.

Dow member Johnson & Johnson dropped 3.1 percent after a US appeals court refused to block sales of a generic version of its prostate cancer drug Zytiga.

KEY FIGURES AROUND 2200 GMT (6 a.m. Thursday in Manila)
 
New York - Dow: FLAT at 24,464.69 (close)

New York - S&P 500: UP 0.3 percent at 2,649.93 (close)

New York - Nasdaq: UP 0.9 percent at 6,972.25 (close)

London - FTSE 100: UP 1.5 percent at 7,050.23 points (close)

Frankfurt - DAX 30: UP 1.6 percent at 11,244.17 (close)

Paris - CAC 40: UP 1.0 percent at 4,975.50 (close)

EURO STOXX 50: UP 1.2 percent at 3,153.91 (close)

Tokyo - Nikkei 225: DOWN 0.4 percent at 21,507.54 (close)

Hong Kong - Hang Seng: UP 0.5 percent at 25,971.47 (close)

Shanghai - Composite: UP 0.2 percent at 2,651.51 (close)

Oil - Brent Crude: UP 95 cents at $63.48 per barrel

Oil - West Texas Intermediate: UP $1.20 at $54.63 per barrel

Pound/dollar: DOWN at $1.2777 from $1.2788 at 2200 GMT

Euro/dollar: UP at $1.1385 from $1.1370 

Dollar/yen: UP at 113.04 yen from 112.77 yen


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