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Saturday, 27 September 2014 00:00 - - {{hitsCtrl.values.hits}}
European shares might escape some of the gloom, with financial spreadbetters predicting Britain’s FTSE 100 to open flat, Germany’s DAX to open between nine points lower and nine points higher, and France’s CAC 40 to gain four to five points, on Friday.
“European equities are set to open flat, but as we’ve seen this week the opening sentiment has had little bearing on where markets have closed,” Capital Spreads dealer Jonathan Sudaria said in a note to clients.
US stocks ended sharply lower on Thursday as Apple Inc broke under key technical levels after the tech giant withdrew an update to its new operating system. That pushed the S&P 500 to its biggest one-day decline since July.
MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.8% on Friday, on track for a weekly loss of around 2.7%.
Japan’s Nikkei stock average lost 0.9%, shedding 0.6% for the week and pulling away from Thursday’s seven-year closing high.
Data released before the market opened showed Japan’s annual core consumer inflation eased in August, in another sign that the Bank of Japan could be forced into additional easing steps to meet its 2 percent inflation goal sometime next fiscal year.
But renewed hope for the Japanese government’s pension reforms limited losses and also checked the yen’s gain earlier in the session. Welfare Minister Yasuhisa Shiozaki denied media reports that suggested Tokyo would delay reforming its $1.26 trillion Government Pension Investment Fund (GPIF).
The dollar index, which tracks the greenback against a basket of major currencies, edged up about 0.1% to 85.278, after it rose to a four-year high of 85.485 on Thursday.
The dollar is on track for its 11th successive weekly rise, something it has not achieved in four decades.
“At the moment, the economy with strong business sentiment is that of the United States... The dollar is becoming the destination of funds that are escaping stimulus elsewhere,” said Daisuke Uno, chief strategist at Sumitomo Mitsui Bank.
The yield difference between 10-year U.S. Treasuries and German Bunds reached its widest in nearly 15 years on Thursday, keeping pressure on the euro.
The European unit edged down about 0.1% on the day to $1.2743, after falling as low as $1.26955 on trading platform EBS on Thursday, its lowest since November 2012.
The dollar erased early losses and was about 0.3% higher on the day against its Japanese counterpart at 109.07 yen, though still shy of a six-year peak of 109.46 climbed a week ago.
Brent crude was slightly up on the day at $97.01 a barrel, but set for its third weekly fall in four, as hefty supplies capped price gains and offset concerns that rising tensions in the Middle East could disrupt supply.
Spot gold added about 0.2% to $1,224.80 an ounce, after rebounding off Thursday’s session low of $1,206.85 an ounce, which was its weakest level since 2 January. It looked set to snap a three-week losing streak, though dollar strength kept it in danger of breaking below the key $1,200-an-ounce level.
