Get all your news in one place.

100’s of premium titles.
One app.

Start reading

Get all your news in one place.

100’s of premium titles. One news app.

Start reading

AFP

Business

European stocks attempt pre-Christmas rebound

Europe London

Will a Santa rally pay a visit to markets?. ©AFP

London (AFP) - European equities rose Monday in light pre-Christmas trade, rebounding gently from last week's losses that followed bumper interest rate hikes, but Wall Street and Asian markets failed to get into the festive spirit.

Equity markets often experience a so-called Santa rally, when prices rise during thin year-end trading dominated by small investors in a festive mood.

"Everyone, it seems, is waiting to see if Santa is going to come around, which leaves the market stuck between feelings of hope and angst," said market analyst Patrick O'Hare at Briefing.com.

"Accordingly, there isn't much happening at the broad market level this morning," he added.

The blue-chip Dow edged lower in late morning trading, while the broader S&P 500 and tech-heavy Nasdaq Composite showed deeper losses.

Michael Hewson at CMC Markets said that most investors are likely "content to sit on the side-lines with the main focus likely to be on this week’s core PCE inflation data and personal spending numbers for November which are due on Friday."

Meanwhile in Europe, stocks moved timidly higher.

Both Frankfurt and London rose 0.4 percent, while Paris added 0.3 percent.

"Markets are grinding higher as some traders are optimistic about valuations which seem to them somewhat attractive," AvaTrade analyst Naeem Aslam told AFP.

"We really don't have much volume in markets as traders are away for holidays," he added.

"Overall I think it's going to be pretty subdued trading, given the lack of significant data to react to," noted analyst Susannah Streeter at stockbroker Hargreaves Lansdown.

Asian indices, however, fell on lingering concern over a possible global recession caused by moves to fight inflation from top central banks.

Equities took a turn south last week after monetary policymakers around the world signalled that while price rises appeared to be stabilising, more work would be needed to get them under control.

All three main indexes on Wall Street ended sharply lower Friday after the Federal Reserve warned it would continue tightening monetary policy into 2023.

That was followed by similar warnings from the European Central Bank and Bank of England, while data suggested economies were feeling the pinch, dealing a blow to sentiment heading into the Christmas break.

"With no shortage of economic headwinds, investors struggle to find something cheerful about this holiday week after the two most dominant central banks cast a pall over the proceedings," said SPI Asset Management's Stephen Innes.

The US sell-off fed through to Asia, where Tokyo shed more than one percent, while Hong Kong, Shanghai, Taipei, Manila, Bangkok, Jakarta and Wellington were in negative territory, but Singapore and Mumbai edged up.

Adding to the downbeat mood was a spike in Covid-19 cases in China following the country's reopening after almost three years of strict containment measures.

While the move is expected to boost the world's number two economy, there is a worry that businesses and China's health system will be hit in the near term.

Still, Beijing flagged a number of measures aimed at kickstarting growth next year, including support for the beleaguered property sector.

An expected pick-up in Chinese demand helped propel oil prices higher, as did plans by the United States to refill its strategic oil reserves.