Chinese growth forecast weighs on market; US and European stocks close lower overnight
City Index March 6, 2012 3:40 PM
<p>Global markets were weaker yesterday and overnight on the back of Chinese growth comments. Since then, traders have been trying to weigh up the still […]</p>
Global markets were weaker yesterday and overnight on the back of Chinese growth comments. Since then, traders have been trying to weigh up the still very healthy growth target of 7.5% compared with prior assumptions around 8%. There is also a layer of politics in the comments, perhaps a sense of under promising and over delivering, as has been the case previously. Only time will tell. Markets are expected to open mixed in Asia today, perhaps early losses being pared back.
Overnight, the S&P500 shed 0.4% while the Nasdaq shed 0.9%. The Dow Jones Industrial Average was off by only 0.1%. Last night’s fall on the S&P500 is biggest two-day drop since January. A fall in Citigroup’s Economic Surprise Index for the US is one of several concerns for the market in the near term. In Europe, Greece Finance Minister Evangelos Venizelos was hopeful bondholders would accept a one-time offer to write off about 100bn Euros. In commodities, copper was down by 1.1% to US$3.85/lb. Gold remained relatively weak, down to US$1705/oz while silver fell back below US$34/oz. In currencies, the Australian dollar fell below 1.07 against the US dollar, last trading at 1.0665 ahead of the monthly meeting from the central bank today. The Euro was flat at 1.3214 while the dollar’s gains against the Japanese Yen were slightly eroded overnight, last buying 81.54.
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