World stocks mostly lower in lackluster trade
Tuesday, December 28, 2010
HONG KONG (AP) — World stock markets were mostly lower Tuesday as investors continued to worry about a recent interest rate rise in China and stayed on the sidelines ahead of the release of key U.S. home price data later in the day.
In early European trade, France’s CAC-40 edged up 12.58 points, or 0.3 percent, to 3,874.77 while Germany’s DAX was down 11.20 points, or 0.2 percent, at 6,959.53. Stock markets in Britain and several Asian countries were closed for a holiday.
Wall Street also looked set to have a lethargic opening, with Dow futures up by 4 points at 11,507.00. Broader S&P futures gained 0.7 points to 1,254.00.
Investors, with little news to focus on during the holiday period, are still bogged down by fears over the effect of China’s rate hike announced over the weekend, analysts said.
“I think it’s a sudden attack by bears in a very quiet situation,” said Alex Wong, director at Ample Financial Group. “Sentiment was still cautious, people are still liquidating mainland banks and also mainland automobile stocks. Mainland property stocks remain weak as well.”
Higher interest rates would make it more expensive for people to borrow money to buy homes. Beijing aims to tame inflation, which jumped to 5.1 percent in November, a 28-month high.
China auto stocks have been dragged down in recent days after an announcement last week that traffic-clogged Beijing would sharply limit new vehicle registrations.
Markets are swinging in wide ranges because not many trades are being done, Wong said.
“A few big orders can move the market right now.”
China’s Shanghai Composite Index fell 1.7 percent to close at 2,732.99 while Hong Kong’s Hang Seng index shed 0.9 percent to end at 22,621.73. Japan’s benchmark Nikkei 225 stock average declined 63.36 points, or 0.6 percent, to finish at 10,292.63.
Elsewhere, South Korea’s Kospi rose 0.5 percent to finish at 2,033.32. Shares in Singapore were higher while those in Thailand and India traded in a narrow range. Markets in Australia and New Zealand were closed for the Boxing Day holiday officially observed Tuesday.
Investors in the U.S. and across Asia were also taking a wait-and-see stance ahead of Tuesday’s release of the closely watched S&P/Case-Shiller house price index for October. The index is a broad gauge of U.S. home prices.
In currencies, the dollar fell to 82.38 yen in Tokyo Tuesday from 82.78 yen in New York late Monday. The euro edged up to $1.3233 from $1.3164.
Benchmark oil for February delivery rose 13 cents to $91.13 in electronic trading on the New York Mercantile Exchange.
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