Breaking News

Resurgent shares still set for biggest weekly loss since Feb

Stock MarketsOct 12, 2018 07:40AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
© Reuters. A man uses a mobile phone in front of an electronic board showing Japan's Nikkei average outside a brokerage in Tokyo

By Ritvik Carvalho

LONDON (Reuters) - Shares worldwide were set for their biggest daily gains in nearly a month on Friday as European and Asian markets recovered from a days-long sell-off that left them set for their worst week since February.

After Asian shares rose overnight, European stocks opened higher, with the pan-European STOXX 600 (STOXX) up 0.7 percent. (EU)

Germany's DAX (GDAXI) was up half a percent while Britain's FTSE 100 (FTSE) gained 0.7 percent.

S&P stock futures pointed to a rebound in U.S. stocks later in the day (ESc1) (N), while the VIX volatility index (VIX) climbed down from an eight-month high.

The MSCI All-Country World index (MIWD00000PUS), which tracks shares in 47 countries, was up half a percent on the day.

"Some traders are cautiously buying back into the market today, but the underlying issues which brought about the sell-off are still relevant," CMC Markets analyst David Madden said.

The biggest market shakeout since February has been blamed on a series of factors, including worries about the impact of a U.S.-China trade war, a spike in U.S. bond yields this week and caution ahead of earnings season.

(Graphic: Latest selloff among 2018 outliers -

Trade figures from China on Friday showed China's trade surplus with the United States hit a record high in September, providing a likely source of contention with U.S. President Donald Trump over trade policies and the currency.

The data showed solid expansion in China's overall imports and exports, suggesting little damage from the tit-for-tat tariffs with the United States.

That added to bullish sentiment on Friday, CMC's Madden said, noting the decision by U.S. Treasury staff to refrain from labeling China a currency manipulator as a positive for stocks.

Shanghai shares bounced 0.9 percent (SSEC), recouping early-session losses of 1.8 percent.

MSCI's broadest index of Asia-Pacific shares outside Japan (MIAPJ0000PUS) rose 2.06 percent, the biggest one-day gain for more than two years.

The bounce came after the index fell 3.6 percent on Thursday to hit a 1-1/2-year low, and it is still on track for a weekly loss of 3.6 percent.

Japan's Nikkei average (N225) rose half a percent.

So far this week, Chinese and U.S. shares are among the biggest losers, a sign investor worries about the trade war are growing.

MSCI's U.S. index (MIUS00000PUS) has shed 5.5 percent, compared with a 4.9 percent fall for MSCI's gauge of stock performance in 47 countries (MIWD00000PUS). China A shares <.MIXNAPUS> are still down 8.7 percent.

"We're still left with the sense that there has been a significant shift that markets now have to take stock of," Daiwa Capital Markets head of economic research Chris Scicluna said.

Gold , which had risen to a 10-week high on the back of the sell-off, fell half a percent on Friday to $1.217.31 an ounce.

The yield on 10-year U.S. notes edged up in Europe to 3.170 percent (US10YT=RR), reversing early-session falls on flight-to-quality bids.

It is off its seven-year Tuesday high of 3.261 percent but a further rise in U.S. borrowing costs might hurt risk sentiment.

Online broker XM investment broker Marios Hadjikyriacos said the pullback in yields was a major comfort factor for investors.

"This can be seen as a self-correcting mechanism, where stocks begin to sell off as bond yields rise, leading investors to shift back to bonds amid the risk-averse environment, hence driving yields back down and calming the stock market," he said.

Adding to the confusion for investors, Trump launched a second day of criticism of the Federal Reserve on Thursday, calling its interest rate increases a "ridiculous" policy.

While that does not appear to have shaken investor confidence in the Fed's independence, some investors suspect expectations on future rate hikes could be undermined if Trump's language becomes more threatening.

The dollar against a basket of major currencies rose 0.1 percent to 95.093. (DXY)

The euro was 0.1 percent lower at $1.1583 (EUR=), after a gain of 0.65 percent on Thursday.

But the yen eased to 112.24 versus the dollar after hitting a three-week high of 111.83 on Thursday.

The Chinese yuan weakened half a percent, giving up some of the gains it had made the previous day.

Oil prices bounced back on Friday.

Brent crude futures (LCOc1) rose 0.4 percent to $80.60 a barrel, holding off a 4-year high of $86.74 touched on Oct. 3.

Resurgent shares still set for biggest weekly loss since Feb

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email