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FTSE 100 to start calmly, Asian markets hit by Chinese liquidity concerns

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The FTSE 100 is set to start Thursday slightly higher as some of the volatility in global equities was becalmed in the past 24 hours.

CFD firm IG Markets sees the blue-chip benchmark some 10p higher, making a price of 6,511 to 6,514 around an hour before the open.

A winding down of the trading hysteria in some the Reddit ‘meme’ stocks, like GameStop, has been a factor and, perhaps more importantly, investments are returning their focus on more typical features in the market.

“Trader’s attention drifted back to topics such as lockdowns, vaccination rates as well as a US stimulus package,” said David Madden analyst at CMC Markets. “The prospect of the Biden administration signing off on a relief package of some shape or form has been the biggest driver of stocks recently,”

On Wall Street, the Dow Jones edged to a 36 point or 0.12% gain on Wednesday to finish at 30,723.

The S&P 500 notched a 0.1% gain for the day, closing at 3,930, whilst the Nasdaq dipped 0.01% to 13,610.

Trading conditions are presently less calm in Asia, however, with Chinese volatility impacted on stocks.

Madden added: “Equity markets in Asia have fallen on tighter liquidity conditions in China.

“Short-term borrowing costs in the country ticked up so that lead to fears the Beijing administration are trying to rein in credit, possibly to curb growth in property and stock prices. European indices are on track to open lower.“

Japan’s Nikkei gave up 304 points or 1.06% to 28,341 whilst Hong Kong’s Hang Seng similarly slipped, losing 0.8% to 29,065. Meanwhile, the Shanghai Composite was 0.45% lower at 3,501.

Around the markets

  • The pound: US$1.3604, down 0.32%
  • Gold: US$1,823 per ounce, down 0.58%
  • Silver: US$26.61 per ounce, down 1%
  • Brent crude: US$58.88 per barrel, up 2.4%
  • WTI crude: US$56.14 per barrel, up 2.5%
  • Bitcoin: US$38,073, up 3.65%

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