Stocks Choppy As Bankers Meet, Trump Talks Debt
Mohammad Ali (@ChaudhryMAli88) Published August 24, 2017 | 09:45 PM
Stocks wobbled Thursday as traders looked to a major central bankers' meeting and weighed comments by US President Donald Trump about the debt ceiling
LONDON, , (UrduPoint / Pakistan Point News - 24th Aug, 2017 ) - Stocks wobbled Thursday as traders looked to a major central bankers' meeting and weighed comments by US President Donald Trump about the debt ceiling.
European indices ended mixed, with London's benchmark FTSE 100 index rising 0.3 percent and the pound perked up as traders reacted to official data confirming Britain's economy grew 0.3 in the second quarter despite high inflation and uncertainty over Brexit.
"The pound fell initially after the data but quickly recovered to trade off its lows just below 1.28 against the Dollar," noted Craig Erlam, senior market analyst at Oanda trading group. Among individual share prices, troubled UK lender Provident Financial continued its recovery, surging 13 percent after losing two-thirds of its value Tuesday on a profits warning.
Attention is now on the Jackson Hole symposium in Wyoming where the world's top bankers are gathering with US Federal Reserve boss Janet Yellen and European Central Bank chief Mario Draghi. With the US and eurozone economies picking up, dealers are hoping for some pointers about the future of monetary policy.
The euro has rallied in recent weeks -- hitting a near eight-year high against sterling -- with the ECB expected at some point to start winding in its massive stimulus, while another round of upbeat economic data Wednesday ramped up those expectations.
"The market is paying close attention to the planned speeches by... Yellen and... Draghi for clues and any significant remark as central banks move toward scaling back their easy monetary policies," Mizuho Bank said in a note.
"But now that minutes of the ECB's policy meeting have shown that policymakers have voiced concerns about the euro's strength, many people believe (Draghi) would avoid making significant remarks.
" US equities started higher, but turned down approaching midday.
They fell on Wednesday after Trump warned in a firebrand speech that he was ready to shut down federal business to force Congress to pay for his controversial Mexican border wall, while also threatening to tear up a trade agreement with Canada and Mexico.
The outburst fuelled concerns that the nascent administration is struggling to find consensus on Capitol Hill -- even with its own Republican party -- raising questions about Trump's ability to push through promised tax cuts, deregulation and infrastructure spending.
It led also to a warning from Fitch that it would review its US sovereign rating if the government was shut down. On Thursday, Trump lashed out at Republic congressional leaders for not having yet raised the US debt ceiling, which could lead to a catastrophic default on sovereign debt action is not taken within weeks.
"While Mr Trump is talking tough about a government shutdown, traders will be fearful of going long," said analyst David Madden at CMC Markets UK. Asian equities were mixed. Hong Kong ended up 0.4 percent -- a third successive gain as traders returned to work after Wednesday's typhoon.
Sydney rose 0.1 percent, Singapore was 0.4-percent higher and Seoul put on 0.4 percent, while there were also gains in Taipei. However, Tokyo eased 0.4 percent on the back of a stronger Yen, while Shanghai closed down 0.5 percent.
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