Stocks Slide, Oil Prices Rally

European and US equity markets took a step lower on Tuesday on valuation concerns and worries about renewed US-China trade tensions

London, May 4 (UrduPoint / Pakistan Point News - 4th May, 2021 ) :European and US equity markets took a step lower on Tuesday on valuation concerns and worries about renewed US-China trade tensions.

Meanwhile oil prices rallied on the prospect of renewed travel in the US and Europe, and the Dollar firmed looking ahead to key US jobs data later in the week.

Traders are awaiting the release Friday of US jobs data for April, with some observers suggesting around one million positions created, but in the meantime investors worried about valuations and renewed US-China trade tensions.

With equities sitting around record or multi-year highs after a more than year-long rally, there is a feeling that they are in store for a small correction soon, before resuming their upward march.

"The peak growth headwind is blowing against the stock market and driving a period of consolidation after the tailwind of reopening optimism catalysed a 5.2 percent gain for the S&P 500 (and a 5.4 percent gain for the Nasdaq Composite) in April," said Patrick O'Hare at Briefing.com.

The flip side of the blockbuster earnings reported by many companies has been warnings about rising prices, which has sparked concern among investors that the US Federal Reserve will need to raise interest rates sooner than expected.

Fed Chief Jerome Powell has sought to reassure markets that a brief surge in inflation won't cause it to taper its stimulus and raise rates.

But "Wall Street won't find out if the Fed is making a policy mistake until several months down the road and that is making some traders nervous," said Edward Moya at Currency trading platform OANDA.

He said the US urging the G7 to agree upon a mechanism to counter Chinese economic might also helped push stocks lower.

"Tensions between the world's two largest economies have been on the back burner, but if this becomes a focal point, risk appetite might not stand a chance in the short-term," said Moya.

After European markets closed the EU said it was suspending efforts to ratify the investment deal it agreed with China late last year.

There were few catalysts to drive business on Asian stock markets, with Tokyo and mainland China's bourses closed for holidays.

However, Hong Kong stocks rose a day after data showed the financial hub had finally escaped recession following seven quarters of contraction caused by the pandemic and the 2019 democracy protests.

In Europe, the main indices all ended the day down, with Frankfurt tumbling 2.5 percent as all stocks on the DAX 30 finished lower with industrial and tech companies suffering the greatest falls.

Wall Street's main indices were lower in late morning trading, with the Nasdaq down 2.5 percent as tech stocks took a beating.

Oil prices extended Monday's rally -- hitting seven week highs -- with traders hopeful for a resumption of travel in the coming months.

"As more US states are easing pandemic-related lockdowns and some European countries are welcoming fully-vaccinated international travellers, the demand for crude oil is returning," said Evelyn Baker at TD Ameritrade.

- Key figures around 1530 GMT - New York - Dow: DOWN 0.7 percent at 33,859.32 points EURO STOXX 50: DOWN 2.0 percent at 3,920.53 London - FTSE 100: DOWN 0.7 percent at 6,923.17 (close) Frankfurt - DAX 30: DOWN 2.5 percent at 14,856.48 (close) Paris - CAC 40: DOWN 0.9 percent at 6,251.75 (close) Hong Kong - Hang Seng Index: UP 0.7 percent at 28,557.14 (close) Tokyo - Nikkei 225: Closed for a holiday Shanghai - Composite: Closed for a holiday Euro/dollar: DOWN at $1.2014 from $1.2066 at 2100 GMT Pound/dollar: DOWN at $1.3877 from $1.3907 Euro/pound: DOWN at 86.63 pence from 86.71 pence Dollar/yen: UP at 109.34 Yen from 109.07 yenBrent North Sea crude: UP 1.7 percent at $68.69 per barrelWest Texas Intermediate: UP 1.5 percent at $65.46 per barrel