World Economy

Global Stocks Drift Lower

The Frankfurt Bourse. The Frankfurt Bourse.

Global stock markets drifted lower on Tuesday as investors were digesting mixed reports on the health of the world economy and awaited more US data later in the day.

Britain’s FTSE 100 fell 0.4% to 6,917 and France’s CAC 40 shed 0.6% to 4,471. Germany’s DAX fell 0.6% to 10,675. Futures augured a tepid start on Wall Street. Dow and S&P 500 futures were both down 0.1%, AP reported.

Global markets have seen small gains and losses as investors digest mixed reports on the health of the global economy.

Japan’s Nikkei 225 fell 1.6% to 16,596.51 as the yen gained against the US dollar. South Korea’s Kospi eked out a 0.1% loss to close at 2,047.76. Hong Kong’s Hang Seng index was down 0.1% at 22,910.84 while Australia’s S&P/ASX 200 dipped 0.1% to 5,532.00. Stocks in mainland China and Taiwan fell and markets in Southeast Asia were mostly lower.

Monetary easing by central banks and a rebound in oil prices have bolstered world stocks, with markets in the US, Europe and Asia outside Japan up roughly 10% since late June.

But, in a sign that the rally in world shares is losing momentum, Chinese stocks pulled back from seven-month highs following a sharp correction in bank shares.

“Equity markets are looking a bit frothy and what’s dragging them down is a bit of softness in the oil price and yen strength,” said Michael Hewson, chief market analyst at CMC Markets. “Investors are a bit nervous but ultimately in a low-yield world, stocks remain a decent bet for yield.”

The spotlight was on currency markets, where the dollar fell more than 1%. The dollar fell to 99.93 yen from 101.21 yen and the euro rose to $1.1293 from $1.1183.

The dollar index, which measures the US currency against six of its peers, slipped to a seven-week low of 94.616.

The greenback has been under pressure for the past week as the perceived chances of a rise in US interest rates this year took a knock from weak data and the tone of some Federal Reserve policymakers.  Benchmark US crude added 18 cents at $45.92 per barrel in New York. The contract jumped $1.25 on Monday after Russia said it would work with Saudi Arabia to achieve market stability. Brent crude, a benchmark used to price international oils, was also 18 cents higher at $48.53 a barrel in London.