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World Shares Slip, Yen Weakens 10/03 04:45
World shares were mostly lower on Thursday after U.S. stocks stalled as
investors awaited developments in the Middle East.
(AP) -- World shares were mostly lower on Thursday after U.S. stocks stalled
as investors awaited developments in the Middle East.
Germany's DAX shed 0.7% to 19,026.36 while the CAC 40 in Paris gave up 0.8%
to 7,514.49. In London, the FTSE 100 gained 0.2% to 8,307.45.
The futures for the S&P 500 and the Dow Jones Industrial Average were down
0.4%.
The U.S. dollar gained against the Japanese yen as officials indicated that
conditions were not conducive for an interest rate hike.
That helped push Tokyo's Nikkei 225 index higher. It gained 2% to 38,552.06,
while the dollar traded at 146.81 Japanese yen, up from 146.41 yen late
Wednesday.
A weaker yen is an advantage for major export manufacturers like Toyota
Motor Corp. and Sony Corp.
The dollar had been trading around 142 yen after the ruling Liberal
Democrats chose Shigeru Ishiba to head the party and succeed Fumio Kishida as
prime minister. Ishiba, who took office on Tuesday, had expressed support for
the central bank's recent moves to raise its near-zero benchmark interest rate,
which stands at around 0.25%. That led traders to bet that the yen would gain
in value.
But after a meeting between Ishiba and Bank of Japan Gov. Kazuo Ueda, both
officials indicated that the central bank did not view further rate hikes as
suitable for the economy at this time. That prompted a flurry of selling of
yen, which benefits big export manufacturers.
The meeting between Ishiba and Ueda had not been expected to bring major
news, however, "when Ishiba hinted that growing global risks should keep the
BOJ firmly grounded, yen bulls hit the exits faster than you can say
'sayonara,'" Stephen Innes of SPI Asset Management said in a commentary.
Elsewhere in Asia, Hong Kong's Hang Seng dropped 1.5% to 22,113.51 as
investors sold shares to lock in profits after the benchmark roared 6.2% higher
a day earlier on a wave of investor enthusiasm over recent announcements from
Beijing about measures to rev up the slowing Chinese economy.
With Shanghai and other markets in China closed for a weeklong holiday,
trading has crowded into Hong Kong. Markets in South Korea and Taiwan also were
closed on Thursday. India's Sensex fell 2.1%.
Oil prices rose again as the world waited to see how Israel will respond to
Tuesday's missile attack from Iran.
U.S. benchmark crude oil gained 56 cents to $70.64 per barrel in electronic
trading on the New York Mercantile Exchange. Brent crude, the international
standard, was up 53 cents to $74.43 per barrel.
Israel is not a major producer of oil, but Iran is, and a worry is that a
broadening war could affect neighboring countries that are also integral to the
flow of crude.
On Wednesday, Wall Street benchmarks ended little changed amid uncertainty
over conflict in the Middle East.
The S&P 500 gained less than 1 point, while the Dow Jones Industrial Average
edged up 0.1%. The Nasdaq composite also added 0.1%.
In the bond market, Treasury yields rose after a report by ADP Research
indicated that hiring by U.S. employers outside the government may have been
stronger last month than expected. That could auger well for the government's
more comprehensive report on the U.S. job market due out Friday.
The dominant question hanging over Wall Street has been whether the job
market can keep holding up after the Federal Reserve earlier kept interest
rates at a two-decade high. The Fed was trying to press the brakes hard enough
on the economy to stamp out high inflation.
Stocks are near records in large part on the belief that the U.S. economy
will continue to grow now that the Federal Reserve has shifted to cutting
interest rates. The Fed last month lowered its main interest rate for the first
time in more than four years and indicated more cuts will arrive through next
year.
Also early Thursday, the euro fell to $1.1041 from $1.1047.
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