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Global Shares Muted
World Economy

Global Shares Muted

Asian shares slipped from near three-week highs on Friday as a rally in oil prices reversed and investors remained cautious about the outlook for the global economy.

Europe also looks set for a lackluster start, with financial spreadbetters predicting Britain’s FTSE 100 and Germany’s DAX will open little changed, Reuters reported.

MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.6%, but gains in previous sessions left it on track for a weekly gain of 4.1%.

MSCI’s emerging market index hit a six-week high overnight on hopes that oil prices were stabilizing, but the positive sentiment didn’t flow through to US shares.

Japan’s benchmark Nikkei 225 lost 1.4% to finish at 15,967.17. Australia’s S&P/ASX 200 inched down 0.8% to 4,952.80. South Korea’s Kospi added 0.3% to 1,914.85. Hong Kong’s Hang Seng fell 0.6% to 19,252.37 and the Shanghai Composite inched down 0.1% to 2,859.05.

Other regional markets also fell, including the Philippines and Indonesia, but shares were slightly higher in Taiwan.

 Rough Start

Stock markets have slumped since the beginning of the year as the price of oil dived and investors fretted about a slowdown in global growth. After that mauling, many markets rebounded in the past week but the underlying concerns that stock prices are too high relative to waning world growth remain.

“The past week saw the rebound in shares and other risk assets continue,” said Shane Oliver, chief economist at AMP Capital in Sydney. “Shares have seen a decent rebound from oversold levels which may have further to go. But with global growth worries remaining it’s still premature to say we have bottomed.”

 Energy

Adding to uncertainty weak oil prices, although there has been a rally over the last few days. Investors are hoping that a round of international talks will lead to a deal that addresses a glut in oil production, but the US government reported that energy stockpiles are still growing. Benchmark US crude was down 18 cents to $30.59 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, a benchmark for international oils, fell 32 cents to $33.96 a barrel.

 Wall Street

A three-day rally ran out of steam on Wall Street as oil prices shed recent gains and Wal-Mart, the first major retailer to report results, had disappointing sales. The Dow Jones industrial average gave up 40.40 points, or 0.3%, to 16,413.43. The Standard & Poor’s 500 index lost 8.99 points, or 0.5%, to 1,917.83. The Nasdaq composite index slid 46.53 points, or 1%, to 4,487.54.

 Currencies

The yen regained its edge, rising to 113.13 per dollar from this week’s low of 114.87. The euro fell to as low as 125.34 yen on Friday, a low last seen in June 2013, and last traded at 125.83 yen. Against the dollar, the common currency traded at $1.11, having slipped to a two-week low of $1.10 on Thursday.

 

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