LONDON (Reuters) – European equities opened higher on Thursday, although market participants were still cautious after Asian equities fell for the fourth day in a row and as the focus shifted to key US data United, later in the session.
Hong Kong’s Hang Seng index led the falls in Asia, falling to its lowest level this year, and Chinese stocks sank as investors abandoned properties and consumers for fears that the crisis of liquidity of the Chinese group Evergrande could affect the economy in general.
The group’s main unit, Hengda Real Estate Group Co. Ltd., requested the suspension of trading in its land corporate bonds after a rebate.
Global stock markets have struggled to make gains so far this week, plagued by concerns about the global economic recovery. Unexpectedly weak data from China on Wednesday bolstered investors ’bets that global growth will slow as a result of COVID-19 and supply chain constraints.
The MSCI global equity index has fallen by around 1.7% since reaching an all-time high on September 7th. At 0722 GMT on Thursday it had fallen less than 0.1%.
The STOXX 600 in Europe rose 0.7% on the day, falling 0.8% the day before.
“We have an unusual situation where the overall market is sideways down, but with a downward risk trend, and that means the Delta variant can reach its peak in the United States, which is leading people to think and recovery, ”Kiran said. Ganesh, head of cross assets at UBS Global Wealth Management.
“At the same time, there are concerns about fiscal consolidation and concerns about China going into foreclosures.”
Investors look closely at inflation data, but the overall picture is mixed: U.S. data on Tuesday showed that inflation cooled and possibly peaked, but inflation in Britain was the highest in years, according to data from Wednesday.
Major banks have told customers to reduce their exposure to stocks, and many market participants expect the equity race to end.
UBS Ganesh also said the regulatory risks to Chinese stocks are not over.
“We will need 3-4 months of silence before people start coming back (to buy Chinese stocks). Large technology companies most exposed to social problems (whether property or education) are subject to regulatory risks. “
The US dollar rose, with the dollar index 0.2% higher on the day at 92,631 at 0739 GMT.
The euro fell 0.2% to $ 1.17865.
The Australian dollar, which is considered a liquid substitute for risk appetite, was 0.2% weaker, at $ 0.73195.
Job data showed that Australian employment fell in August, as coronavirus closures in Sydney and Melbourne forced companies to lay off workers and reduce working hours.
Weekly US job data and monthly retail sales will be presented later in the session.
“Even with the slowdown in retail sales over the past few months, retail sales are still almost 20% above the baseline prior to COVID and our American colleagues think the slowdown / normalization that will come will likely be maintained until 2022, ”RBC analysts wrote a note to clients.
Oil prices fell, comparing some of the big gains made in the previous session after a larger-than-expected drop in crude oil stocks in the United States.[O/R]
Germany’s benchmark 10-year yield reached a two-month high ahead of a emissions recovery. The head of the European Central Bank, Christine Lagarde, will have to speak at 1200 GMT.
The U.S. 10-year Treasury yield remained at 1.3056%.
Reports by Elizabeth Howcroft, additional reports by Sujata Rao; Edited by Emelia Sithole-Matarise