Stocks Diverge As Tech Stocks Dip
Faizan Hashmi Published February 08, 2023 | 11:22 PM
Stock markets wavered on Wednesday, with tech shares falling and investors digesting President Joe Biden's calls for tax hikes and the latest interest rate signals from US Federal Reserve chief Jerome Powell
London, (UrduPoint / Pakistan Point News - 8th Feb, 2023 ):Stock markets wavered on Wednesday, with tech shares falling and investors digesting President Joe Biden's calls for tax hikes and the latest interest rate signals from US Federal Reserve chief Jerome Powell.
In his annual State of the Union speech on Tuesday, Biden urged unity and touted a blue-collar economic resurgence, with proposals including a new minimum tax on billionaires.
Traders also tracked remarks from Powell, who reiterated Tuesday that inflation was coming down -- but conceded interest rates might need to go higher than expected to get it under control.
Wall Street's three major indices were down at midday, with the tech-heavy Nasdaq down 1.4 percent.
Shares of Google's parent company Alphabet sank eight percent after the company presented some of the features of its Bard chatbot amid a battle over Artificial Intelligence with Microsoft.
Shares of video game-maker Activision Blizzard also fell after UK regulators said Microsoft's $69 billion takeover bid could harm competition and consumer choice.
European markets were given a boost by bumper annual profits at French energy major TotalEnergies and Norwegian peer Equinor, mirroring UK rivals BP and Shell.
But the Paris CAC 40 index fell at the end of the day following disappointing earnings for banking giant Societe Generale while the Frankfurt DAX finished higher. London's FTSE 100 hit a record 7,934.30 points earlier in the day but later pared down some of the gains.
In Asia, Tokyo, Hong Kong and Shanghai closed lower.
The energy sector has reaped gigantic earnings as a result of soaring oil and gas prices following key energy producer Russia's war on Ukraine.
Oil prices rose slightly on Wednesday on fresh bets of rebounding Chinese demand as the superpower emerges from almost three years of tough zero-Covid restrictions.
Biden said the massive oil profits were "outrageous" as he called for the tax on corporate stock buybacks to be quadrupled.
- 'Soothing message' - AJ Bell investment director Russ Mould said Powell "had just the soothing message the market was looking for".
A run of key US data in recent months has indicated a series of bumper hikes last year was beginning to pay off, fuelling hopes that the Fed could pause its tightening cycle and even lower borrowing costs at the end of the year.
But a forecast-busting jobs report on Friday -- showing half a million new jobs created in January -- stoked speculation that more increases were on the way.
"Concerns that last Friday's bumper jobs report would see the Fed react to what it perceived as an overheating labour market were eased, with Powell's relatively relaxed response possibly reflecting the seasonal anomalies which often affect the January numbers," added Mould.
"Whether Powell will remain so relaxed if the next set of payroll figures are similarly elevated is open to question," he said.
Powell's remarks were also similar to what he said last Wednesday, after the bank's latest policy meeting, which sparked an equities rally.
Fawad Razaqzada, analyst at City Index and Forex.com, said Powell's speech was "deemed neutral overall".
"Powell acknowledged that the disinflationary process is underway, but also suggested that interest rates may have to be pushed even higher if jobs data continues to show upside surprises," Razaqzada said.
- Key figures around 1640 GMT - New York - Dow: DOWN 0.6 percent at 33,940.88 points London - FTSE 100: UP 0.3 percent at 7,885.17 (closed) Frankfurt - DAX: UP 0.6 percent at 15,412.05 (closed) Paris - CAC 40: DOWN 0.2 percent at 7,119.83 (closed) EURO STOXX 50: DOWN 0.2 percent at 4,209.15 (closed Tokyo - Nikkei 225: DOWN 0.3 percent at 27,606.46 (close) Hong Kong - Hang Seng Index: DOWN 0.1 percent at 21,283.52 (close) Shanghai - Composite: DOWN 0.5 percent at 3,232.11 (close) Euro/dollar: UP at $1.0728 from $1.0726 on Tuesday Pound/dollar: UP at $1.2073 from $1.2048 Euro/pound: DOWN at 88.84 pence from 89.04 pence Dollar/yen: UP at 131.34 yen from 131.07 yenBrent North Sea crude: UP 0.3 percent at $83.93 per barrelWest Texas Intermediate: UP 0.4 percent at $77.44 per barrel
Related Topics
Recent Stories
Mired in crisis, Boeing reports another loss
Session Awarding Ceremony 2024 held at Cadet College Muzaffarabad
Austrian ski great Hirscher to make comeback under Dutch flag
Pakistan, Japan agrees to convene 'Economic Policy Dialogue'
FM Dar conveys deepest sympathy on torrential rains devastation in UAE
Spain PM Sanchez says weighing resignation after wife's graft probe
Tennis: ATP/WTA Madrid Open results - 1st update
Long-lost Klimt portrait auctioned off for 30 mn euros
Osaka seals first win on clay since 2022 in Madrid
Earthquake jolts Karachi
Sindh minister orders operation after attack on police in Ghotki
TikTok to fight US ban law in courts
More Stories From Business
-
Mired in crisis, Boeing reports another loss
5 hours ago -
Pakistan, Japan agrees to convene 'Economic Policy Dialogue'
6 hours ago -
British-Pakistani firm unveils $35 million luxury apartments for overseas Pakistanis in Islamabad
6 hours ago -
European stocks lose momentum after global rally
6 hours ago -
New pulses varieties imperative to cater domestic food requirements: Dr Khalid Hasan
7 hours ago -
CEO KP-EZDMC meets CRBC officials
7 hours ago
-
Pakistan among nine poor countries that produces 90 percent cigarettes for world
8 hours ago -
Chief Minister Gilgit Baltistan Haji Gulbar Khan calls on Minister for Privatisation
8 hours ago -
Germany nudges up growth forecast, ailing economy at 'turning point'
8 hours ago -
Revised UAF budget recommended
8 hours ago -
IDEA, TEVTA organizes Job Fair for youth
8 hours ago -
Massive financial, administrative scam unearthed at SCCI
9 hours ago