Global Stocks Ending Action-Packed Week Solidly
LONDON (AP) — Global stock markets traded in fairly narrow ranges on Friday at the end of a fairly eventful week that saw oil prices spike sharply after attacks on Saudi oil facilities and the Federal Reserve cut interest rates again.
Though oil prices are up strongly on the week, there’s been an element of relief in stock markets that they did not ratchet up even higher. Coupled with the Fed’s decision to cut rates again, the mood in stock markets has remained fairly positive, not least on Wall Street where both the Dow Jones industrial average and the broader S&P 500 index were not far off record highs.
“It’s been a bit of a strange week for equity markets, slipping back initially at the start on concerns that the sharp move higher in oil prices caused by last weekend’s drone strike on Saudi Arabia’s oil infrastructure might knock the stuffing out of the global economy in the coming weeks and months,” said Michael Hewson, chief market analyst at CMC Markets.
“The lack of any escalation so far appears to have tempered a good proportion of this week’s surge higher, in the oil price, prompting equity markets to recover from their lows, nonetheless there remains a significant amount of unease as to what might unfold over the course of the next few days and weeks.”
In Europe, Germany’s DAX rose 0.1% to 12,470 and the CAC 40 in France increased 0.4% to 5,683. Britain’s FTSE 100 was 0.1% higher at 7,362. Wall Street looked set for modest gains at the bell with Dow futures and the broader S&P 500 futures up 0.2%.
Earlier in Asia, the Sensex index in Mumbai was the standout, closing 5.2% higher at 37,978.01 after the Finance Ministry announced a slew of tax concessions that brought the effective corporate tax rate for most domestic companies to just over 25% from 30%.
India’s economy, the world’s 6th largest, has been growing at its slowest rate in five years, stymied both by domestic troubles and weakening global demand.
The lower tax rates will hurt revenues but are aimed at stimulating investment and shoring up waning confidence.
“The fiscal steps by the Indian government are likely to re-energize investor interest in the subcontinent,” Jeffrey Halley of Oanda said in a commentary.
“India still has a non-performing loan swamp to drain, but this is most definitely a step in the right direction,” he said.
Elsewhere in Asia, Japan’s Nikkei 225 index gained 0.2% to 22,079.09 and the Shanghai Composite index rose 0.2% to 3,006.45. The Kospi in South Korea climbed 0.5% to 2,091.52 and Australia’s S&P ASX 200 picked up 0.2% to 6,730.80. Hong Kong’s Hang Seng edged 0.1% lower, to 26,432.86.
ENERGY: Benchmark U.S. crude was up 61 cents at $58.74 a barrel in electronic trading on the New York Mercantile Exchange. It’s up 6.3% this week following the attack on a Saudi Aramco facility last weekend that temporarily cut the country’s exports by half. Brent crude, the international standard, rose 43 cents to trade at $64.83 a barrel.
CURRENCIES: The euro was down 0.1% at $1.1027 while the dollar was steady at 107.94 yen.