LONDON: Stocks mostly rose on Monday, with investors awaiting inflation updates this week from the eurozone and UK after soaring numbers out of the US and China.
US President Joe Biden and China’s Xi Jinping meanwhile speak Monday at a virtual summit aimed at defusing some of the tensions that have built up over Taiwan and other flashpoint issues, but with both sides signalling little appetite for compromise.
European and Asian equity markets mostly enjoyed gains Monday after another healthy pre-weekend showing on Wall Street, though global inflation concerns after news last week of surging prices in the world’s two biggest economies dampened the mood.
While optimism about the global economic recovery remains intact, the rise in prices at rates not seen for decades has traders increasingly worried that central banks will have to tighten monetary policy quicker and more sharply than previously thought.
“Following the blow number from the US last week, traders are not walking into the European inflation data light-hearted,” noted Ipek Ozkardeskaya, senior analyst at Swissquote.
Separate data out of the United States last week showing consumer sentiment at a 10-year low indicated that the issue is being felt more in people’s pockets, putting pressure on the Federal Reserve to step in.
However, for now officials are sticking to their view that the inflation spike will be temporary and peter out as supply chain problems are resolved.
Tokyo’s stock market enjoyed a strong showing Monday, shrugging off news that the Japanese economy contracted more than forecast in the third quarter.
There was little initial reaction to data showing China’s retail sales grew far more than expected in October, with traders concerned about a slowdown in Chinese economic growth owing to lockdowns put in place to battle fresh virus outbreaks.
The weakness is giving the country’s central bank a headache as it must try to nurture a recovery while at the same time keeping a lid on inflation, which is sitting at levels not seen since the mid-1990s.
A new stock exchange focused on smaller-scale firms meanwhile began trading in Beijing on Monday, as China cracks down on domestic tech giants.
– Key figures around 1145 GMT –
London – FTSE 100: DOWN 0.1 percent at 7,339.46 points
Frankfurt – DAX: UP 0.1 percent at 16,111.33
Paris – CAC 40: UP 0.4 percent at 7,120.32
EURO STOXX 50: UP 0.1 percent at 4,376.29
Tokyo – Nikkei 225: UP 0.6 percent at 29,776.80 (close)
Hong Kong – Hang Seng Index: UP 0.3 percent at 25,390.91 (close)
Shanghai – Composite: DOWN 0.2 percent at 3,533.30 (close)
New York – Dow: UP 0.5 percent to 36,100.31 (close)
Euro/dollar: UP at $1.1453 from $1.1445 on Friday
Pound/dollar: UP at $1.3434 from $1.3413
Euro/pound: DOWN at 85.25 pence from 85.33 pence
Dollar/yen: DOWN at 113.82 yen from 113.85 yen
Brent North Sea crude: DOWN 1.6 percent at $80.83 per barrel
West Texas Intermediate: DOWN 1.4 percent at $79.70 per barrel
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