Worries over economic recovery shake world stocks

U.S. stocks were lower after the close on Wednesday, as losses in the Oil & Gas, Basic Materials and Technology sectors led shares lower. At the close in NYSE, the Dow Jones Industrial Average fell 0.20%, while the S&P 500 index lost 0.13%, and the NASDAQ Composite index fell 0.57%. Benchmark 10-year Treasury notes were lower in Asian hours yielding 1.3290, having edged lower on Wednesday after a strong auction by the U.S. Treasury. The New York Fed Bank President on Wednesday said the central bank’s decision on tapering is not indicative of timing for lifting rates. Those dovish remarks followed comments from St. Louis Fed Bank President that the tapering plan should move forward despite the slowdown in job growth.

Analysts expect the ECB to announce a cut to the pace of its emergency bond purchases from next quarter but will keep buying bonds at least until 2024 under its main program, and possibly much longer. Ahead of Thursday’s decision, the euro slipped to $1.1814, a little off Friday’s two-month high of $1.1909, while the dollar was steady against a basket of its peers, having gained in the previous three sessions. Germany stocks were lower after the close on Wednesday, as losses in the Industrials, Technology and Software sectors led shares lower. At the close in Frankfurt, the DAX lost 1.47% to hit a new 1-month low, while the MDAX index declined 0.86%, and the TecDAX index lost 1.08%. France stocks were lower after the close on Wednesday, as losses in the Foods & Drugs, Gas & Water and General Financial sectors led shares lower; at the close in Paris, the CAC 40 fell 0.85%, while the SBF 120 index lost 0.81%

Asian shares dropped Thursday, while the dollar held firm, in line with a cautious global mood as investors worried about the combination of slowing global growth and the potential tapering of central bank stimulus. MSCI’s broadest index of Asia-Pacific shares outside Japan lost 1.04% while Japan’s Nikkei dropped 0.57%. There were losses in Australia down 1.90%, Korea off 1.53%, and in Hong Kong which shed 2.04% late in the session, with tech names leading the declines there. The Hang Seng Tech Index fell 2.44% in early trading, weighed by declines in Tencent Holdings down 3.7% and Netease Inc down over 7% after China’s government on Wednesday summoned gaming firms to ensure they implement new rules for the sector. Chinese blue chips were down 0.41% just after the bell.

The Russian stock market after a local morning correction following the external grounds returned to growth on the back of rising oil prices, ending trading in the positive. Rusal (shares renewed their highs today thanks to the rise in aluminum after the coup in Guinea. The Moscow Exchange index grew by 0.18% while the RTS index increased by 0.15% to 1,726.53 points. The Russian economy has “recovered” after the novel coronavirus pandemic but its recovery potential has not been exhausted yet, Economic Development Minister Maxim Reshetnikov told reporters on Wednesday. The Minister noted that the recovery of the Russian economy is evidenced by the improvement of the situation on the labor market, a positive picture in the sectoral context, as well as positive dynamics in the area of investments. Quotes of Russian sovereign Eurobonds rose slightly on Wednesday thanks to the stability of the base interest rates. Tinkoff Bank is planning to place perpetual USD subordinated Eurobonds to replenish its Tier 1 capital. It is assumed that the structure of the bank’s “perpetual” Eurobonds issue will provide for a call option in 5.25 years. Citi, JP Morgan, Alfa-Bank, Gazprombank, Renaissance Capital, Societe Generale and BCP Securities were appointed organizers of the placement.

Oil prices ticked lower, giving up some of last session’s gains following a slow recovery in production in the U.S. Gulf of Mexico output following Hurricane Ida offered some support. U.S. crude dipped 0.1% to $69.23 a barrel. Brent crude fell 0.11% to $72.55 per barrel. Gold dropped slightly, languishing near two-week lows with the spot price at $1,787.67 per ounce off 0.09%.