Gazeta Lodz - Stock markets slide despite easing recession risks

NYSE - LSE

CMSC	-0.12%	21.45	$
VOD	1.22%	16.42	$
RBGPF	0%	71.34	$
BCE	0.64%	23.47	$
BP	0.52%	42.53	$
NGG	-0.19%	81.05	$
RYCEF	0.62%	20.84	$
GSK	-0.97%	49.52	$
RIO	-0.43%	95.68	$
BTI	-0.51%	57.06	$
CMSD	-0.05%	21.58	$
JRI	0.5%	12.61	$
BCC	-1.07%	83.24	$
RELX	-0.7%	34.43	$
AZN	-0.5%	156.45	$

Stock markets slide despite easing recession risks

POLITICS 21.02.2023

Equities slid on Tuesday, with investors brushing off positive data as a risk that central banks will push interest rates higher and economies into recession.

Text size:

Private-sector growth has accelerated across Europe this month, according to key surveys from S&P.

The agency's purchasing managers' index (PMI) data was published alongside a separate survey showing that German investor confidence rose again in February.

Taken together, the reports increased the chances that major European economies would avoid recession this year, analysts said, despite expectations that the US Federal Reserve and other central banks will continue to raise interest rates to further cool inflation.

"At a time of such uncertainty over inflation, interest rates, and the economy, these forward-looking business surveys carry extra weight," said Craig Erlam, senior markets analyst at the brokerage firm OANDA.

The eurozone PMI showed the indicator at 52.3 this month, up from 50.8 in January -- a reading over 50 represents economic growth.

Output in the single currency bloc turned around in January after a slump tied to supply chain disruptions, the Covid pandemic and the war in Ukraine.

Recovery was evident also in Britain, where the purchasing managers' index hit 53 in February, up from 48.5 the previous month.

The "UK has a greater chance of avoiding a recession according to the latest health check of the economy", said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown.

The improving economic situation is "boosting expectations that both the ECB and BoE will tighten their respective monetary policies further" to further push down sticky inflation, said City Index analyst Fawad Razaqzada, referring to the European Central Bank and Bank of England.

Europe's main stock indices ended the day roughly a half percentage point lower.

Wall Street headed lower upon returning from a three-day holiday weekend, with the Dow shedding 1.6 percent in late morning trading.

"We have recently found ourselves back in a ‘good news is taken as bad news’ period for stocks, with today’s raft of improved PMI surveys across Europe and the US resulting in widespread selling on the premise of ‘higher for longer’ interest rates," said Joshua Mahony, senior market analyst at online trading platform IG.

Elsewhere, oil prices traded mixed Tuesday as worries about higher interest rates and possible recession played off against hopes that China's economic reopening from strict Covid lockdowns would fuel a surge in demand.

Shares in Credit Suisse hit a record low of 2.52 Swiss francs as rumours circulated that chairman Axel Lehmann could face a probe by regulators over his public comments regarding the outflow of client funds from the troubled bank.

Switzerland's number two bank has been shaken by a series of scandals since losing billions in the 2021 collapse of Greensill and the implosion of US asset manager Archegos, leading to a change in chief executive and a massive restructuring.

Both Credit Suisse and the Swiss financial markets regulator Finma declined to comment.

Shares in Walmart fell 2.5 percent at the start of trading after the retailer offered a disappointing outlook as inflation weighs on consumers.

But they quickly rebounded and were up 0.6 percent in late morning, with the company having posted better-than-expected profits over the critical holiday-season quarter.

- Key figures around 1630 GMT -

New York - Dow: DOWN 1.6 percent at 33,298.74 points

London - FTSE 100: DOWN 0.5 percent at 7,977.75 (close)

Frankfurt - DAX: DOWN 0.5 percent at 15,397.62 (close)

Paris - CAC 40: DOWN 0.4 percent at 7,308.65 (close)

EURO STOXX 50: DOWN 0.5 percent at 4,250.40 (close)

Tokyo - Nikkei 225: DOWN 0.2 percent at 27,473.10 (close)

Hong Kong - Hang Seng Index: DOWN 1.7 percent at 20,529.49 (close)

Shanghai - Composite: UP 0.5 percent at 3,306.52 (close)

Euro/dollar: DOWN at $1.0670 from $1.0686 on Monday

Pound/dollar: UP at $1.2119 from $1.2035

Euro/pound: DOWN at 88.04 pence from 88.80 pence

Dollar/yen: UP at 134.74 yen from 134.07 yen

West Texas Intermediate: UP less than 0.1 percent at $76.36 per barrel

Brent North Sea crude: DOWN 1.2 percent at $83.09 per barrel

burs-rl/cw

Z.Kaczmarek--GL

Featured

Jaded voters, same old choices: Brazil kicks off election campaign

Brazil's leftist president Luiz Inacio Lula da Silva and his right-wing rival Flavio Bolsonaro kick off their election campaigns on Sunday in a race that has many voters feeling a weary sense of deja vu.

'Everyone lives in fear': Yemenis worry about return to all-out war

Yemen's years-long civil conflict killed tens of thousands of people, uprooted millions and drove the country to the brink of famine before a 2022 truce restored relative calm. Now, renewed hostilities between the Houthi rebels and the government have many fearing the return of all-out war.

Zambia's vote marred by intimidation, counting pause: observers

International observers of Zambia's elections said Saturday the poll was marred by claims of intimidation, abductions and an hours-long pause in the vote count.

South Korea president proposes talks with North to formally end Korean War

South Korean President Lee Jae Myung proposed talks with North Korea to formally end the long-running Korean War, as Pyongyang deepens ties with Russia while asserting its status as an "irreversible" nuclear state.