Global
shares dip, dollar back on track
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[November 10, 2015]
By Patrick Graham
LONDON (Reuters) - Asian stock markets fell
and European shares struggled to find traction on Tuesday as investors
digested the fallout of the third quarter earnings season and last
week's strong signals from the U.S. jobs market.
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More than 1 percent falls in Hong Kong and South Korea led
Asian markets to one-month lows as the prospect of a rise in U.S.
borrowing costs and slower world growth haunted developing markets.
European stock exchanges started with some cautious gains before
inching back into the red, and the euro was back on the defensive as
investors bet the U.S. Federal Reserve would move next month,
driving the dollar broadly higher.
"People are a little nervous because the macro signals are so
mixed," said Andy Sullivan, a portfolio manager with Swiss
investment firm GL Financial Group.
"The weak revenues we've seen on aggregate in the earnings season
are obviously a sign of concern. Growth is both tepid and fragile.
But profits were better and that says to me that companies have got
themselves in better shape."
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After a healthier start, the pan-European FTSEurofirst 300 index was
down less than 0.1 percent while the euro zone's blue-chip Euro
STOXX 50 index was marginally higher. Both have gained almost 10
percent this year, having recovered from a China-driven dip in July
and August.
Vodafone was among the leading gainers after a strong earnings
report, although political uncertainty continued to weigh on
Portuguese stocks. More than three quarters of U.S. and European
companies have now reported for the quarter.
A bigger than expected fall in Chinese inflation followed
disappointing trade figures over the weekend and underlined the
problems in an economy that has driven world growth for a decade.
But they also add to expectations of more stimulus measures from
Beijing to counter any slowdown.
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"Today's data point to intensifying deflation risks in the Chinese
economy which warrant more policy easing," said HSBC economist Jing
Li, forecasting 3 full percentage points of cuts in banking reserve
ratios this and next year.
Shanghai stocks were among the strongest performers, down just 0.1
percent at the close.
After pausing on Monday, the dollar was back near 6-month highs
against the euro in morning trade in Europe, up more than 0.1
percent on the day.
Higher U.S. interest rates will make parking funds in the dollar
more attractive, especially as some of the dollar's major rivals
such as the euro have negative interest rates. Most major banks
expect the greenback to strengthen into the end of the year.
(Editing by Tom Heneghan)
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