The stock markets are struggling in the Christmas business



Stock markets fell mostly on Wednesday as investors struggled to find a traditional “Santa Claus rally” in the final days of the year.

The “Santa Claus rally” is a seven-day period over Christmas and New Year’s when stocks typically rise on low trading volume.

London’s FTSE 100 closed 0.3 percent higher than Friday after a four-day Christmas break, but most other major markets fell.

“When we check on Santa Claus, he hasn’t left the building yet, but he seems kind of stuck in a revolving door,” said Patrick O’Hare, an analyst at Briefing.com.

Wall Street stocks fell

After rising at the open, Wall Street stocks fell as US Treasury yields – a proxy for Federal Reserve interest rates – rose again.

Investors worry about recession risk as central banks have hiked interest rates to curb inflation. Higher borrowing costs lead to slower economic activity.

“There’s not a lot of confidence or appetite for riskier assets among investors and traders,” Avatrade chief market analyst Naeem Aslam told AFP.

“We will most likely see this trend continue with very little volume in the market,” Aslam said.

inflation

China’s steps towards reopening also reignited inflation concerns.

Beijing has abruptly lifted the strict pandemic restrictions that have kept the world’s second-largest economy isolated since 2020.

On Monday, Beijing announced it would end quarantine measures for overseas arrivals from Jan. 8, the latest step in easing its zero-Covid regime after ending mandatory testing and lockdowns earlier this month.

China’s abolition of curbs has raised hopes of an economic revival.

“The good news is that inflation is easing as China reiterates its role as a global supplier of cheap goods and supply chain congestion eases,” said analyst Stephen Innes of SPI Asset Management.

However, he also warned that China’s accelerating demand would push up commodity prices, which in turn would further fuel global inflation.

Hong Kong investors

Meanwhile, shares in Hong Kong rose as investors digested the Covid news from Beijing on the first day of trading after the Christmas break.

Hong Kong Chief Executive John Lee also announced further easing of the city’s remaining Covid measures.

Elsewhere, oil prices fell as traders weighed the potential impact of China’s reopening and Russia’s crude export ban against buyers applying a price cap imposed by Western nations.

key figures

New York – Dow: MINUS 0.5 percent at 33,060.85 points

EURO STOXX 50: DOWN 0.6 percent at 3,808.82

London – FTSE 100: up 0.3 percent at 7,497.19 (close)

Frankfurt – DAX: 0.5 percent down at 13,925.60 (closing price)

Paris – CAC 40: DOWN 0.6 percent at 6,510.49 (close)

Tokyo – Nikkei 225: down 0.4 percent at 26,340.50 (close)

Hong Kong – Hang Seng Index: up 1.6 percent to 19,898.91 (close)

Shanghai – Composite: down 0.3 percent at 3,087.40 (close)

Euro/Dollar: DOWN at $1.0624 from $1.0640 on Tuesday

Pound/dollar: rise to $1.2036 from $1.2025

Euro/Pound: DOWN at 88.28p from 88.48p

Dollar/yen: up to 134.23 yen from 133.49 yen

West Texas Intermediate: FALSE, up 1.7 percent at $78.17 a barrel

North Sea Brent Crude: FALSE, up 1.6 percent at $83.31 a barrel

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