HomeNewsGlobal risk sell-off eases, worries remain

Global risk sell-off eases, worries remain


Financial markets regained some composure Thursday after the previous session’s broad sell-off of riskier assets, with European shares inching up but the euro hurt by new worries about some of its weaker member economies.

Wall Street looked set for a mixed start, with buying interest mainly on blue chips stocks.

Asian stock markets, catching up with Wednesday’s moves in the West, slid to a near three-week low.

The resulting mix took world stocks as measured by MSCI and Thomson Reuters down roughly 0,3%, compared with Wednesday’s loss of around 2,8%.

The pan-European FTSEurofirst 300 .FTEU3, however, was up half a percent. This came despite weaker-than-expected Greek growth figures and unemployment data that posted a record jump, reinforcing concerns over peripheral euro zone economies.

Wednesday’s sell-off was prompted by growing doubts about global economic growth.

The US economy, in particular, is showing signs of stumbling, prompting the US Federal Reserve to take steps to hold down borrowing costs.

A spate of data from China has also confirmed its rapid imports and factory output growth to be slowing.

“We could see economies relapse and double dip or struggle through and begin to grow with private demand starting to carry their weight,” said Peter Elston, strategist at Aberdeen Asset Management in Singapore.

“It is very unclear which of those two we are going to get.”

Global economic worries also preyed on the oil market, where crude slid for a third day.

US crude for September delivery fell 82 cents or more than 1% to $77,20 a barrel, extending its decline following a 3% fall on Wednesday, its biggest drop in six weeks.

Earlier, Japan’s Nikkei .N225 closed down nearly 0,9%.

Euro lifts dollar

The dollar recovered earlier losses to gain a third of a percent versus a basket of currencies, mainly as a result of euro weakness.

The US currency posted its biggest one-day gain in two years on Wednesday.

The euro was trading flat to lower versus the dollar at $1,2829 after the Greek data.

It had fallen more than 2% on Wednesday on a widening in euro zone peripheral spreads and a broad strengthening in the dollar.

German government bonds were also flat to lower.

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