Stocks and the dollar gained Friday as traders weighed weak European economic data and concerns over escalating tensions in the Russia-Ukraine war.
Bitcoin pushed on further with its march towards the $100,000 mark, as the cryptocurrency benefits from US president-elect Donald Trump’s pledge to ease regulation around digital tokens.
The dollar, considered a safe haven asset, was also bolstered by geopolitical uncertainty after Russia said the conflict in Ukraine had the characteristics of a “global” war and did not rule out strikes on Western countries.
The Russian ruble slumped to its lowest level against the US dollar since March 2022, a day after Moscow fired a hypersonic missile on Ukraine and Washington sanctioned a key Russian bank.
The euro sank to a two-year-low against the dollar and the pound retreated after closely watched surveys showed contractions in business activity in November in the eurozone and the UK.
Paris and Frankfurt stocks initially fell after a survey showed that Germany and France, the eurozone’s two biggest economies, were once again driving the weakness, with the latter posting the fastest fall in activity since January.
“Businesses across Europe seem to be acutely concerned about the risks posed by president-elect Trump’s radical tariff proposals,” said Matthew Ryan, head of market strategy at financial technology firm Ebury.
Germany’s third-quarter growth was also downgraded Friday with official data showing it expanded even more weakly than previously thought.
But as the euro fell both Paris and Frankfurt stocks managed to recover their losses.
“The eurozone data has increased the chance of more rate cuts from the ECB next year,” said Kathleen Brooks, research director at XTB, as well a cut of 50 basis points next month.
“Investors have been jolted into recalibrating interest rate expectations on the back of this bleak economic news,” she added.
London managed to gain around 1.2 percent despite data showing that retail sales figures for October undershot forecasts, as the pound fell against the dollar.
Wall Street opened with modest gains after having ended Thursday on a positive note with observers saying traders had dialled back their gloom over Nvidia’s huge earnings that fell short of the highest expectations.
“Market participants are waiting to see if there will be follow through on yesterday’s gains, hopeful that there will be but mindful that already stretched valuations are challenging breakout efforts,” said Briefing.com analyst Patrick O’Hare.
In Asia, Tokyo climbed as the government prepared to announce a $140 billion stimulus package to kickstart the country’s stuttering economy.
However, Hong Kong and Shanghai sank on a sell-off in tech firms caused by weak earnings from firms including Temu-owner PDD Holdings and internet giant Baidu.
Bitcoin set a new record high of $99,505.45 Friday morning before easing back slightly.
It is broadly expected to soon burst through $100,000 as investors grow increasingly hopeful that Trump will pass measures to deregulate the crypto sector.
Bitcoin has soared more than 40 percent since his election victory this month and it has more than doubled since the turn of the year.
The recent surge has also been “driven by news that Trump could set up an official crypto department that would sit in the heart of US government”, said XTB’s Kathleen Brooks.
In a further boost, the top US securities regulator Gary Gensler, who oversaw measures to rein in cryptocurrencies, announced Thursday that he intends to step down when Trump takes office in January.
The move clears the way for the president-elect to pick Gensler’s successor.
– Key figures around 1430 GMT –
New York – Dow: UP 0.2 percent at 43,975.58 points
New York – S&P 500: UP 0.1 percent at 5,954.29
New York – Nasdaq Composite: UP less than 0.1 percent at 18,988.49
London – FTSE 100: UP 1.2 percent at 8,246.11
Paris – CAC 40: UP 0.2 percent at 7,320.17
Frankfurt – DAX: UP 0.5 percent at 19,245.86
Tokyo – Nikkei 225: UP 0.7 percent at 38,283.85 (close)
Hong Kong – Hang Seng Index: DOWN 1.9 percent at 19,229.97 (close)
Shanghai – Composite: DOWN 3.1 percent at 3,267.19 (close)
Euro/dollar: DOWN at $1.0414 from $1.0476 on Thursday
Pound/dollar: DOWN at $1.2516 from $1.2587
Dollar/yen: DOWN at 154.69 yen from 154.54 yen
Euro/pound: UNCHANGED at 83.20 pence
West Texas Intermediate: UP less than 0.1 percent at $70.14 per barrel
Brent North Sea Crude: DOWN less than 0.1 percent at $74.18 per barrel
burs-rl/giv
