London (AFP) – Europe’s stock markets rebounded Friday, mirroring Wall Street gains at the end of a highly volatile and holiday-shortened Christmas week, dealers said.
Frankfurt, London and Paris stock markets each soared by about 1.5 percent in mid-morning deals, as investors eyed New York’s late overnight surge.
Volatility reigned supreme this week as investors grappled with worries over slowing global economic growth, trade wars, Brexit uncertainty and a US government shutdown, as well as President Donald Trump’s attacks on the Federal Reserve.
“The final trading week of 2018 has been explosively volatile and wildly unpredictable,” said analyst Lukman Otunuga at traders FXTM.
“Global sentiment repeatedly swung from extremely bearish to bullish this week as investors tussled with concerns over slowing global growth, US-China trade developments, Brexit-related uncertainty and a partial US government shutdown.”
“Although US stock markets bounced back to life yesterday … it is certainly too early for any celebrations.”
Wall Street, after staging its best rally in nine years the day after Christmas, had opened meekly on Thursday — and losses accelerated following disappointing consumer confidence data.
However, a rally in the last 30 minutes caused the Dow to stage a comeback, ending up 1.1 percent at the close at 23,138.82 as worries over the economy also gave way to bargain-hunting.
That marked an impressive 870-point recovery from the low point of the session.
“This rollercoaster ride is unlikely to stop anytime soon as investors continue to wear emotions on their sleeve,” said Oanda analyst Stephen Innes.
“Keep in mind that when markets start trading off the frenzy factor — as we’ve seen during the last 24 hours — extreme market moves can cut both ways.”
– Tokyo suffers annual loss –
Asian indices moved with caution on Friday after days of volatility on global markets failed to boost confidence.
But Tokyo’s benchmark Nikkei index ended the year with its first annual loss since 2011, trading in negative territory throughout Friday.
“It’s inevitable that selling emerges after sharp rises like yesterday’s,” said Makoto Sengoku, market analyst at Tokai Tokyo Research Centre.
Over the year, Tokyo’s bellwether index has lost more than 10 percent.
“The Nikkei scored annual gains for the past six years under Abenomics but it’s not the case any more,” Sengoku said, referring to Prime Minister Shinzo Abe’s pro-spending policies.
“This is because of large swings caused by the Trump administration rather than domestic problems,” he told AFP, noting Trump’s trade spat with China also weighed.
Elsewhere on Friday, Hong Kong closed up 0.1 percent, while Shanghai added 0.4 percent in a modest end to its last trading day of 2018.
In commodities action, oil prices rebounded by more than a dollar at the end of a topsy-turvy week.
– Gold shines –
Star performer gold held close to its highest level for more than six months, as investors sought out the haven investment.
The glamourous precious metal had spiked on Thursday as high as $1,284.75 an ounce.
“It is shaping up to be an incredibly positive trading week for gold prices thanks to heightened geopolitical risks and dollar weakness,” added Otunuga.
“Explosively volatile equity markets, global growth fears, Brexit uncertainty and political instability in Washington have accelerated the flight to safety — ultimately sending gold prices to levels not seen in more than six months.”
In addition, the weak greenback makes dollar-priced commodities cheaper for buyers using stonger currencies. That tends to stimulate demand and prices.
– Key figures around 0945 GMT –
London – FTSE 100: UP 1.5 percent at 6,682.43 points
Frankfurt – DAX 30: UP 1.5 percent at 10,540.81
Paris – CAC 40: UP 1.4 percent at 4,661.31
EURO STOXX 50: UP 1.4 percent at 2,977.10
Tokyo – Nikkei 225: DOWN 0.3 percent at 20,914.77 (close)
Hong Kong – Hang Seng: UP 0.1 percent at 25,504.20 (close)
Shanghai – Composite: UP 0.4 percent at 2,493.90 (close)
New York – Dow: UP 1.1 percent at 23,138.82 (close)
Euro/dollar: UP at $1.1444 from $1.1436 at 2200 GMT
Dollar/yen: DOWN at 110.37 yen from 111.02 yen
Pound/dollar: DOWN at $1.2640 from $1.2650
Oil – Brent Crude: UP $1.09 at $53.25 per barrel
Oil – West Texas Intermediate: UP $1.21 at $45.82
burs-rfj/jh
COMMENTS
Please let us know if you're having issues with commenting.