Saturday , June 6 2020

FTSE 100 LIVE: Asian stocks struggle amid growing concerns over global economy recovery | City & Business | Finance

MSCI’s broadest index of Asia-Pacific shares outside Japan was flat. The risk-sensitive Australian dollar retreated from an overnight two-month high and safe-haven demand drove US Treasury yields back under 0.7 percent. The moves follow a downbeat end to the day on Wall Street, after a report from medical news website STAT cast doubt over positive early results from a Moderna Inc COVID-19 vaccine trial. The report said the results, which had rallied global stocks this week, lacked detail.

Chinese stocks began the day a little lower and Hong Kong’s Hang Seng slipped 0.1 percent. Australia’s benchmark was flat while a soft yen helped the Nikkei 0.7 percent higher.

“This is probably more a stabilisation than anything else, because markets have rallied hard on opening up and the potential for a V-shaped recovery,” said Jun Bei Liu, a portfolio manager at Australia’s Tribeca Investment Partners.

“The market is a little bit directionless…from here on, it certainly feels like we will see a lot more poor economic data,” she said, with investors likely to take their strongest cues from company outlook commentaries and confidence surveys.

Two thirds of 223 fund managers surveyed by Bank of America reckon recent gains are a bear-market rally.


8.01am update: FTSE 100 opens 

The FTSE 100 index opened at 6002.23

7.47am update: FTSE update 

The FTSE 100 index at 7.44am was unchanged at 6002.23.

7.26am update: Inflation low in April 

UK inflation plunged to its lowest level for nearly four years last month due to tumbling fuel costs and energy prices, according to official figures.

The rate of Consumer Price Index inflation decreased to 0.8 percent in April from 1.5 percent in March, the Office for National Statistics said.

Most economists expected inflation to fall to 0.9 percent.

CPI is now far wide of the Bank of England’s 2 percent target, while it is set to drop sharply lower still, with some economists bracing for a near-zero headline rate of inflation by the summer.

The ONS said average petrol prices dropped by 10.4p a litre between March and April – the biggest fall since unleaded petrol records began in 1990 – amid the global oil price rout.

Energy prices also pushed inflation lower as regulator Ofgem reduced its default tariff cap.

Jonathan Athow, deputy national statistician for economic statistics at the Office for National Statistics, said: “While the coronavirus limited the availability of some goods and services, its effect on prices was more muted.

“Falling petrol and diesel prices, combined with changes to the domestic energy price cap were the main reasons for lower inflation in April.

“Games, toys and hobbies saw rising prices, perhaps as people occupied their time at home.

“Food prices grew no more quickly than other goods and services, though fresh vegetables did see stronger rises.

7.20am update: Oil steady 

Oil was steady and benchmark 10-year yields on US Treasuries dipped 1.5 basis points to 0.6948 percent.

Yields fall when prices rise.

Gold rose slightly to $1,745.84 per ounce down 0.3 percent. 

7.11am update: EU futures flat

European futures were subdued with FTSE futures and EuroSTOXX 50 futures down 0.3 percent. S&P 500 futures rose 0.6 percent.

6.18am update: Business group cautions US on ‘reshoring’ too much China supply

The US Chamber of Commerce on Tuesday warned the US government against overdoing a major effort underway to rip US supply chains out of China in the wake of the coronavirus pandemic, saying such moves could harm the economy.

“Protecting the resiliency of our supply chain doesn’t have to mean reshoring all production in the United States,” Chamber Chief Executive Thomas Donohue told an online conference.

He said there may be a need in future to increase domestic production in some industries “but there will also need to continue to be a huge place in the U.S. economy for a global supply chain.”

President Donald Trump has long pledged to bring manufacturing back from overseas, but the coronavirus pandemic and concerns about dependency on Chinese imports have sparked a flurry of new activity on the issue.

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