Global stock markets were mixed yesterday as traders reacted to the outlook for US interest rates and some healthy post-Brexit data in Britain.
European stocks advanced with London’s benchmark FTSE 100 index closing up 0.14% at 6,868.96 points, while in the eurozone, Frankfurt’s DAX 30 won 0.6% at 10,603.03 points and the Paris CAC 40 gained 0.4% at 4,437.06 points. Euro Stoxx 50 was up 0.4% at 2,992.53 points at close.
Tokyo’s main index, however, sank as the dollar fell against Japan’s haven yen currency, hurting share prices of the country’s exporters.
On Wall Street the Dow Jones Industrial Average near midday was essentially flat, with shares in Wal-Mart Stores gaining 2.0% after reporting better-than-expected second-quarter earnings of $3.8bn.
The pound meanwhile rallied against the dollar as official data revealed that British retail sales surged by 1.4% last month — indicating no immediate fallout from Brexit, although analysts warn of a tough year ahead.
Sterling jumped to $1.3133 from $1.3038 late in New York on Wednesday.
Craig Erlam, senior market analyst at Oanda trading group, noted that UK retail sales “brushed off any early side effects of Brexit to post strong July gains.”
However Samuel Tombs, chief UK economist at Pantheon Macroeconomics, warned that looking ahead in Britain “with firms intending to stop hiring and inflation set to soar, the high street is set for a tough year”.
The dollar was impacted also by minutes from the Federal Reserve’s July meeting that showed caution about raising US interest rates, analysts said, describing overall investor sentiment as muted.
In Asia the minutes said the US central bank’s policymakers were keeping their “options open” and remained divided on the threat of inflation, which hit Japan’s market hard.
Its cautious tone did little to raise hopes for a rise in US borrowing costs, which would tend to lift the greenback by stirring demand for dollar-denominated assets.
Tokyo’s stocks tumbled 1.6% as the stronger yen — a negative for exporters as it tends to dent their profits — hurt shares in companies such as car giants Toyota and Nissan.
The Japanese market came under further pressure after local data showed exports slipped in July as shipments of vehicles, ships and steel products fell.
In other key Asian markets Shanghai also fell 0.2%, while Hong Kong rallied 1%.