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Morning Market Update: Late Squeeze Trims Losses

Global markets slumped overnight as concerns about a slowing Chinese economy continue to weigh on investor decisions.

European stocks fell for a fifth day, erasing their gains for the year, as Goldman Sachs cut China’s growth forecast amid concern banks in the world’s second-largest economy face a cash crunch.

The Stoxx 600 declined 1.7% to 276 at the close of the trading session in London.

The FTSE 100 lost 87 points (-1.4%) to close trading at 6,029 while the German DAX shed 97 points (-1.2%) to settle at 7,692.

US stocks also fell, sending the S&P 500 to a nine-week low. On top of Chinese credit fears, investors were also still digesting the impact of a possible reduction in the Federal Reserve’s monetary stimulus.

The S&P 500 fell by 19 points (-1.2%) to finish at 1,573 in New York, the lowest since April 22. The blue-chip Dow Jones slipped 140 points (-0.9%) to settle at 14,660.

Gold fell in New York as prospects that the Federal Reserve will reduce monetary stimulus curbed demand for the metal as a protection of wealth.

Gold futures for August delivery declined 1.2% to settle at $1,277.10.

Crude oil gained for the first time in four days after three pipelines in Alberta, Canada were shut because of flooding. Crude oil for August delivery rose by $1.49 to settle at $95.18 a barrel.

The U.S. Dollar Index rose to a two-week high as investors fled higher-yielding currencies in favor of the relative safety of dollar-denominated assets. There is no major local economic data due to be released during today’s session.

 

Morning Market Update: Late Squeeze Trims Losses is a post from: Australian Stock Report Market Pulse Blog