European shares start trade lower on worries over US slowdown
European shares started trade lower on Thursday after a report showed US manufacturing growth reached a three-year low in October, threatening profits.
The UK’s FTSE 100 started the session 0.38% weaker, the DAX fell 0.50% and the CAC 40 was down 0.60%. The Institute for Supply Management on Wednesday said its gauge of US manufacturing growth fell to a three-year low of 51.2 in October. The index is barely over the 50-point threshold which shows growth. Concerns that the report augurs an economic slowdown which could hurt growth caused US blue chips to fall for the fourth day in a row on Wednesday.
The Dow Jones industrial average fell 0.41%, to end at 12,031.02. The Standard and Poor's 500 Index dropped 0.74%, to finish at 1,367.81. The Nasdaq Composite Index slid 1.37%, to close at 2,334.35.
The weak US growth data also caused worry among Asian exporters, sending Japanese shares southward on Thursday. Japan’s Nikkei share average fell 0.15% to 16,350.02, its lowest level in almost a month. NYMEX crude oil futures were little changed at below $59 on Wednesday after some US fuel stocks were released.
The euro was steady at 1.2757 to the dollar early on Thursday, after reaching a one-month high of 1.2799 a day earlier. The ECB is expected to leave rates unchanged at 3.25% at a meeting on Thursday, but ECB President Jean-Claude Trichet is expected to give a clear signal that rates could rise in December when he speaks in the afternoon. The Budapest Stock Exchange's (BÉT) main BUX index started trade 0.25% higher at 22,446.82. Hungarian analysts predicted shares would weaken on Thursday.
Erste Bank's Tamás Pletser said Hungarian shares would follow the path of US shares on Wednesday. Takarékbank's Gergely Suppan also said Hungarian shares would slip, but he noted that falling US yields could prove a boon to emerging markets. He added that falling oil prices would hurt Mol's share price. (Mti-Eco)
SUPPORT THE BUDAPEST BUSINESS JOURNAL
Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.