Wall Street shares mostly rose Monday ahead of an expected US interest-rate cut later this week while concerns over political battles in Europe and China’s struggling economy sent other world markets lower.
Bitcoin, meanwhile, hit a new record high at $106,493.43 as it continues to gain support from Donald Trump’s backing of cryptocurrencies.
In New York, the tech-heavy Nasdaq and the broad-based S&P 500 were up in morning deals while the Dow was flat following a lacklustre performance last week.
Investors are turning their attention to Wednesday’s US Federal Reserve decision on borrowing costs at its last policy meeting of the year before Trump takes office next month.
The Fed is widely expected to cut its key lending rate for a third straight time, reducing it by a quarter point despite a recent uptick in inflation.
But there are fears it will have to slow its pace of easing next year owing to sticky inflation and bets that Trump’s tax cuts and tariffs will reignite prices.
Kathleen Brooks, research director at trading platform XTB, said there would be “an elephant in the room” at the Fed meeting:
“How to accurately forecast economic activity and inflation rates, when the President elect’s policies are expected to have a huge economic impact and could trigger more inflation.”
– China and Europe worries –
Investors also tracked data showing Chinese retail sales grew 3.0 percent last month, much slower than October and well off the five-percent forecast.
Hong Kong and Shanghai indices closed lower after the data release while oil prices fell slightly on concerns over Chinese demand.
Chinese officials have unveiled a string of aggressive measures in recent months aimed at bolstering growth in the world’s second biggest economy.
In Europe, the Paris stock market dropped after Moody’s downgraded France’s credit rating Saturday following months of political crisis and the appointment of centrist Francois Bayrou as prime minister.
“The market is likely to watch closely to see how the political problems in France affect sentiment in the German economy,” said Jochen Stanzl, analyst at CMC Markets.
Frankfurt fell as Germany’s embattled centre-left Chancellor Olaf Scholz faced a confidence vote that was expected to trigger the process towards February 23 elections.
The European Central Bank cut rates again last week as inflation appears to come under control and the eurozone economy shows signs of weakness.
ECB chief Christine Lagarde said Monday the bank would keep lowering interest rates, and she warned that higher US tariffs under Trump could hit growth in the bloc.
A closely-watched survey showed Monday business activity declined further in the eurozone in December, though less sharply than the previous month thanks to an upturn in the services sector.
On the corporate front, three spinoffs from French right-wing tycoon Vincent Bollore’s Vivendi media empire debuted on stock markets, with mixed results.
Shares in the Canal+ television and film group tanked by around 20 percent in London.
The other two spinoffs had a better start: Book publisher Louis Hachette soared almost 27 percent on the Euronext Growth in Paris while advertising agency Havas was up 1.2 percent in Amsterdam in afternoon deals.
Shares in the remaining Vivendi company, which stayed on the Paris stock exchange, was up more than three percent.
In London, the UK government approved the £3.6 billion ($4.5 billion) takeover of Royal Mail’s parent company, International Distribution Services (IDS), by Czech billionaire Daniel Kretinsky’s EP Group.
IDS shares were up 0.8 percent.
– Key figures around 1445 GMT –
New York – Dow: FLAT at 43,830.77 points
New York – S&P 500: UP 0.2 percent at 6,063.22
New York – Nasdaq: UP 0.4 percent at 19,995.99
Paris – CAC 40: DOWN 0.8 percent at 7,350.78
Frankfurt – DAX: DOWN 0.4 percent at 20,327.68
London – FTSE 100: DOWN 0.4 percent at 8,271.35
Tokyo – Nikkei 225: FLAT at 39,457.49 (close)
Hong Kong – Hang Seng Index: DOWN 0.9 percent at 19,795.49 (close)
Shanghai – Composite: DOWN 0.2 percent at 3,386.33 (close)
Euro/dollar: DOWN at $1.0491 from $1.0504 on Friday
Pound/dollar: UP at $1.2651 from $1.2622
Dollar/yen: UP at 154.14 yen from 153.60 yen
Euro/pound: DOWN at 82.99 pence from 83.19 pence
West Texas Intermediate: DOWN 0.3 percent at $71.06 per barrel
Brent North Sea Crude: DOWN 0.1 percent at $71.05 per barrel
dan-bcp-lth/cw
