Global markets pause as two-day rally loses steam
The pause came ahead of key US economic data yesterday and a speech by US Federal Reserve Chair Janet Yellen
AFP
AFP, NEW YORK: A two-day global stocks rally showed signs of fatigue Thursday as oil prices briefly breached $50 a barrel before pulling back.
Bourses in Paris and Frankfurt mustered 0.7 per cent gains, but stock indices in London, New York and Tokyo finished with minor moves.
The pause came ahead of key US economic data Friday and a speech by US Federal Reserve Chair Janet Yellen. Markets were also watching a G7 meeting in Japan.
In general, weve had two very good days in the market ... and things are just taking a breather now, said Sam Stovall, chief investment strategist at SP Global Market Intelligence.
Analysts said investors were cautious ahead of Fridays US economic growth data for the first quarter, which could be revised higher from the initial 0.5 per cent growth rate, and a speech by Yellen that will be scrutinized for clues about the prospects for hiking interest rates.
Hot-button issues to be discussed at the G7 include rising concerns with an assertive China, the impending British Brexit vote and sluggish economic growth.
Right now were kind of in no-mans-land, and the burden of proof is on the bulls to keep the market going from the last two days, said Michael James, managing director of equity trading at Wedbush Securities.
Most global equity indices posted strong gains on Tuesday and Wednesday behind a number of factors, including a eurozone deal to unlock bailout funds for Greece, stronger confidence that Britain will vote next month to stay in the European Union and optimism about the US economy.
On Thursday, markets had one of those quietly solid days where not a lot happens and investors are fine with that, consolidating the highs hit on Wednesday, Spreadex analyst Connor Campbell told AFP.
Oil touches $50
Oil prices briefly topped $50 a barrel, a key psychological level following a slump during much of the last two years that pushed the commodity near $25 a barrel in February.
But oil finished slightly under $50 a barrel, and some analysts questioned whether petroleum would rise further from here.
I think people feel like $50 dollars is a kind of sell-point where the people whove made their profits are going to get out of the market, said Mike Lynch of Strategic Energy Economic Research.
So it may act as a temporary ceiling.
Madrid was weighed down by a crash in Banco Popular shares, which lost more than a quarter of their value after the bank asked shareholders to stump up 2.5 billion euros ($2.8 billion) for new shares to strengthen its balance sheet.
Embattled Japanese auto supplier surged 21.2 per cent on reports that US private equity firm KKR wants to invest in the embattled airbag supplier. Takata earlier this month logged an annual net loss of $120 million, as it struggles with a massive recall crisis over exploding airbags tied to 13 deaths in the United States and Malaysia.
Chinas leading online marketplace Alibaba rose 3.7 percent, recovering part of the losses from Wednesday that came on news of a US investigation into its accounting.
