Soft Wall Street Weighs On World Markets


Soft Wall Street weighs on world markets

LONDON, (UrduPoint / Pakistan Point News -6th Sept,2016) : Weak US economic data weighed on Wall Street Tuesday, in turn triggering profit-taking in European markets which were also worried about weaker oil prices.

As fears about the economic impact of Britain's EU exit begin to ease, a rallying pound also helped push London's benchmark FTSE 100 lower. After opening higher off a public holiday, US shares turned negative as fresh data indicated the US economy's huge service sector unexpectedly slowed in August.

Although the ISM's purchasing managers index for the service sector, the key engine of the American economy, remained in expansion mode, it fell to 51.4 from 55.5 in July.

"The slump in the ISM non-manufacturing index to a six-year low...

should all but rule out any possibility of a September (Fed interest) rate hike, particularly as the manufacturing index fell back below the 50 mark last month," Capital Economics' Paul Ashworth said in a note to investors.

Shares in Frankfurt closed marginally higher, while Paris' CAC 40 was slightly lower, with dealers reacting to the slowing US services sector, analysts said. The US data came in much weaker than expected, said Daniel Larrouturou at Diamant Bleu Gestion in Paris. "This was an opportunity for profit-taking in a market that had risen quite a lot in recent sessions," he said.