European shares dropped on Friday amid economic uncertainties and a global outage affecting airlines, banks, and financial services.
This turbulent market week saw a tech sell-off amid deepening Sino-U.S. trade tensions, Biden’s uncertain presidential fate, weak Chinese data, and a lackluster third plenum.
Tokyo’s recent interventions in the foreign exchange market have also kept traders on edge.
“We might just be getting a taste of things to come. “And that means more turbulence,” said Matt Simpson, senior market analyst at City Index.
On Friday, major U.S. airlines grounded flights due to communication issues, while global carriers, banks, and media companies faced system outages.
LSEG Group’s Workspace platform experienced a global outage, disrupting financial markets and hindering user access.
European stocks fell 0.6%; meanwhile, London stocks dropped 0.7% in early trading.
In Asia, MSCI’s Asia-Pacific index fell 1.6%, marking its worst week in three months with a nearly 3% loss.
S&P 500 futures rose 0.16%, while Nasdaq futures rose 0.3%.
Technology stocks struggled in Asia; consequently, South Korea’s KOSPI index fell 1%, while Taiwan stocks dropped 2%.
In China, investors were disappointed by the lack of implementation details for economic policies revealed at Thursday’s plenum.
Chinese officials on Friday noted “many complex contradictions” in their economic goals, signaling a challenging path for policy implementation.
Chinese blue-chips rose 0.55%, but the CSI300 Real Estate index fell 2%, as the weak property sector hindered growth.
“Apart from very broad-brush platitudes devoid of stimulus, economic policy references to quality over quantity may also imply a willingness to tolerate slower overall growth,” said Vishnu Varathan, chief economist for Asia ex-Japan at Mizuho Bank.
Euro Weakens, Dollar Gains; Oil and Gold Prices Drop
The euro, at $1.0887, fell 0.4% after the ECB held rates steady but hinted at a September cut due to worsened economic forecasts.
“The policy statement gives little away, offering no meaningful changes from June and continuing to stress a data-dependent approach to policy setting,” said Nick Rees, FX market analyst at MonFX.
Meanwhile, the dollar was on the move, recovering from a four-month low against a basket of currencies earlier this week.
Sterling sank to $1.2934 as statistics revealed that British retail sales volume dropped more than expected in June.
The dollar was supported by strong U.S. manufacturing and job data, yet traders still anticipate a September rate cut.
The yen, at 157.41 per dollar, is poised for a weekly gain due to potential Japanese intervention and rising core inflation.
Oil prices dropped; Brent crude futures fell 0.4% to $84.70 a barrel, whereas U.S. crude futures decreased 0.58% to $82.34.
Gold fell 0.6% from this week’s record high of $2,483.60, as global interest rate cuts loom.
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