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Wall Street steady but stocks fall elsewhere

LONDON: Wall Street stayed near record highs on Wednesday, but stocks elsewhere slid as the banning of China Telecom from the United States and Germany’s downgrade to its growth outlook weighed on sentiment.
Both the Dow and S&P 500 edged up at the opening bell from their record closes, although they failed to strike all-time, intra-day highs, and then later dipped into the red.
“The restraint is owed partly to a belief that the stock market seems ripe for a consolidation period after a huge move this month,” said Briefing.com analyst Patrick J. O’Hare.
“The lacklustre action yesterday — after more good earnings news — was a testament to that belief,” he added.
Wall Street, and global markets generally, have rebounded from drops in September when investors took fright at surging inflation and the prospect of tighter monetary policy.
A strong corporate earnings season has provided some much-needed support to investors in recent weeks as companies showed resilience in the face of supply snarls, surging commodity and wage costs, as well as spiking Covid-19 cases.
But long-running friction between Washington and Beijing continues to cast a dark shadow over trading floors, with the two sides locked in a stand-off over a range of issues including Taiwan, national security, technology, trade and Hong Kong.
– China Telecoms ban –
Focus was also on the tech sector after the US Federal Communications Commission cancelled the operating licence of China Telecom’s US unit on Tuesday, saying it “raised significant national security and law enforcement risks”.
The move came after a clampdown by former US president Donald Trump on other giants including Huawei and China Mobile.
It “seems to dampen previous hopes that the US-China relations may be turning for the better”, said Jun Rong Yeap of IG Asia.
Most of the rest of Asia was also in the red as a forecast-beating jump in Australian core inflation added to broad fears about soaring global prices.
Investors are also keeping tabs on the crisis in China’s property sector with several developers struggling to meet their debt obligations, while industry giant Evergrande faces a new deadline at the end of the week to avoid a default.
In Europe, a downgraded government growth forecast of 2.6 percent for Germany this year, largely owing to bottlenecks in global supply chains, dampened sentiment.
In afternoon trading, the Frankfurt DAX was down 0.4 percent and in Paris the CAC shed 0.2 percent.
Meanwhile, the British government upgrading its 2021 growth forecast to 6.5 percent as it unveiled its budget failed to help London stocks, with the FTSE 100 down 0.2 percent.
Oil markets slid Wednesday but remained around multi-year highs on expectations about surging demand and concerns over supplies.
All eyes will be on the European Central Bank Thursday when it updates on its monetary policy amid expectations that major central banks will begin tapering their huge cash stimulus injections and raise interest rates before the end of the year as the economy recovers and inflation surges.
– Key figures around 1330 GMT –
London – FTSE 100: DOWN 0.2 percent at 7,262.57 points
Frankfurt – DAX: DOWN 0.4 percent at 15,700.10
Paris – CAC 40: DOWN 0.2 percent at 6,753.14
EURO STOXX 50: DOWN 0.2 percent at 4,216.57
New York – Dow: UP 0.1 percent at 35,796.87
Tokyo – Nikkei 225: FLAT at 29,098.24 (close)
Hong Kong – Hang Seng Index: DOWN 1.6 percent at 25,628.74 (close)
Shanghai – Composite: DOWN 1.0 percent at 3,562.31 (close)
Euro/dollar: UP at $1.1617 from $1.1604 at 2040 GMT
Pound/dollar: DOWN at $1.3735 from $1.3767
Euro/pound: UP at 84.60 pence from 84.26 pence
Dollar/yen: DOWN at 113.61 from 114.14 yen
Brent North Sea crude: DOWN 1.6 percent at $85.00 per barrel
West Texas Intermediate: DOWN 1.8 percent at $83.13 per barrel

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M M Alam

M. M. Alam is a Pakistan-based working journalist since 1981. Karachi University faculty gold medalist Alam began his career four decades ago by writing for Dawn, Pakistan’s highest circulating English daily. He has worked for region’s leading publications, global aviation periodicals including Rotors (of USA) and vetted New York Times as permanent employee of daily Express Tribune. Alam regularly covers international aviation and defense-related events including Salon Du Bourget (France), Farnborough (United Kingdom), Dubai (UAE). Alam has reported thousands of events and interviewed hundreds of people in Pakistan, UAE, EU, UK and USA. Being Francophone Alam also coordinates with a number of French publications.