European stock markets dipped Thursday, Sept. 8, 2016, while the euro struck two-week highs against the dollar after the European Central Bank left its key interest rates unchanged and decided against extending the duration of its bond-buying stimulus program. Energy stocks slumped as crude oil prices fell.
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KEEPING SCORE: The Dow Jones industrial average fell 188 points, or 1 percent, to 18,291 as of 11:10 a.m. A sell-off in technology stocks weighed on the Nasdaq composite index, which fell 24.44 points, or 0.5 percent, to 5,259.48. The Standard & Poor’s 500 index slid 53.49 points, or 2.5%, to 2,127.81.
Japan’s Nikkei.N225 lost 0.1 per cent, easing away from a three-month top in the face of a strengthening yen.
The prospect of rising interest rates sent bond prices lower, pushing the yield on the 10-year Treasury to its highest level since late June. Asian markets were mostly lower Friday on disappointment about the European Central Bank’s decision to keep policy unchang. The measure is heading for a 1.9 percent advance this week as traders pared bets the Federal Reserve will raise rates at its September meeting while speculation swirled over whether the Bank of Japan will add to already record stimulus.
Shares in the USA and Europe fell after European Central Bank chief Mario Draghi played down the prospect of an increase in asset purchases at a time when concern over the impact of Brexit on the euro area is mounting. The S&P 500 declined 1.5%, on track for its biggest drop since it fell 1.8% on June 27, the second day of a selloff that followed the U.K.’s vote to leave the European Union. Enterprise was down 36 cents, or 1.3 percent, at $26.90.
Japan’s Topix index slid 0.3 per cent as the yen added 0.4 per cent against the U.S. dollar on Friday. Britain’s FTSE 100 was 0.4 percent lower at 6,832.
In Asia, concerns over North Korea’s latest nuclear test hit stocks in South Korea. Crude for October delivery spiked $2.12 or 4.7 percent to $47.62 a barrel on the New York Mercantile Exchange.
ENERGY: Crude oil prices were moving higher following a report indicating a big drop in fuel stockpiles.
New Zealand’s S&P/NZX 50 Index declined 0.9 percent, as did Australia’s S&P/ASX 200 Index. Brent crude, used to price worldwide oils, was up 72 cents, or 1.5 percent, to $48.70 in London. Earlier, a report showing that imports rose in China last month for the first time since late 2014, while a contraction in exports narrowed, helped lift some markets in Asia.
The Hang Seng gained 0.8% despite wider losses in the region, after a Chinese regulator said it would allow domestic issuers to invest in Hong Kong-listed stocks through a trading link with Shanghai. Seoul’s Kospi added 0.1 percent to 2,063.73, while India’s Sensex rose 0.3 percent to 29,006.18.
BONDS AND CURRENCIES: Bond prices fell.
Gold was last at $1,334 an ounce, down 0.3 per cent on the day but still up 0.7 per cent this week, the biggest weekly gain in six.
EURO SOLID: Europe’s single currency maintained its firm tone after the decision, trading 0.5 percent higher at a two-week high of $1.13.
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The dollar index, which tracks the US currency against a basket of six currencies, rose 0.4 per cent to 95.43, nearing its highest levels on Tuesday before a weak USA service sector report knocked the dollar 1 per cent lower.
