Christmas cheer melts on markets
A dramatic global stock rally faded yesterday after a fall in Chinese industrial profits offered a reminder of the pressures on the world economy.
Still, an index of world stocks stayed off near two-year lows hit earlier this week before Wednesday's 1,000 point-plus surge on the US Dow Jones index, which was attributed to the strongest Christmas sales in years.
"Yesterday was a blowout day for US equity markets which triggered optimism that this could be a key reversal day but the upward momentum has not really followed through," said Lee Hardman, an analyst at MUFG in London. "One reason is that maybe the sharp move higher was driven by year-end rebalancing, which exaggerated the scale of the rebound."
MSCI's gauge of stocks across the globe shed 0.95pc and US crude fell 2.01pc to $45.29 per barrel after each staged big rallies the day prior. Markets in mainland China as well as Hong Kong closed weaker after data showed earnings at industrial firms dropped in November for the first time in nearly three years. A Reuters report added to the gloom around the world's second-biggest economy, saying the White House was considering barring US firms from buying telecoms equipment from China's Huawei and ZTE.
The FTSE 100 hit a two-and-a-half year low, retreating from the St Stephen's Day rally seen on Wall Street. It closed down 101.31 points, or 1.52pc, to 6,584.68, its lowest level since July 2016, a month after the vote on Britain's membership of the EU.
Germany's DAX fell 2.4pc while France's CAC declined 0.6pc. The ISEQ Index was down 1.3pc to close at 5,325.99.