Stock markets drop as geopolitics, inflation concerns weigh

Weather - Sydney 18°C

Stock markets drop as geopolitics, inflation concerns weigh

ECONOMY 25.03.2024

Stock markets drop as geopolitics, inflation concerns weigh / Photo: © AFP/File

Leading European and Asian stock markets retreated Monday, as recent record heights gave way to concern over increased geopolitical tensions and stubbornly-high inflation according to traders.

Change text size:

"Heightened tensions between Ukraine and Russia have brought a halt to the rally in equity markets seen last week," noted Russ Mould, investment director at AJ Bell.

"Investors were nervously watching proceedings from the sidelines, particularly as oil prices crept up once again."

Moscow has escalated its aerial attacks on Kyiv, targeting key infrastructure in the wake of Ukrainian attacks on Russian oil facilities.

Russia is a key producer of oil, while the Gaza-Israel war has given rise to worries about Middle Eastern crude supplies.

The Kremlin has meanwhile refused to comment on the Islamic State group's claims that it was behind the deadliest attack in Russia in two decades, as rescuers searched for bodies amid the rubble of the burnt-out Moscow concert hall.

At least 137 people were killed after gunmen in camouflage stormed Crocus City Hall on Friday, shooting spectators before setting the building on fire in the most fatal attack in Europe to have been claimed by Islamic State jihadists.

- Inflation -

Stock markets took a knock also from concerns about elevated inflation, even if it has come down from four-decade highs and central banks are poised to start cutting interest rates.

"Optimism has been surging about the prospects for interest-rate cuts and brighter economic horizons ahead, despite some uncertainty lingering about stubborn inflation in the US," said Susannah Streeter, head of money and markets at Hargreaves Lansdown.

Traders were awaiting the release Friday of key US inflation data.

After last week's Federal Reserve projections for US interest rates indicated it would cut three times this year, traders are optimistic about the outlook for equities.

However, figures showing the US economy remains in rude health raised concerns that the central bank might not be able to bring borrowing costs down as quickly as hoped, keeping a lid on sentiment.

Those concerns were echoed by Atlanta Fed chief Raphael Bostic on Friday, when he said he saw inflation remaining sticky and saw just one rate cut this year, instead of the two he had previously foreseen.

Eyes are now on the release of the personal consumption expenditures (PCE) index, the Fed's preferred gauge of inflation, with traders hoping for a reading that shows price gains slowing further.

The report follows recent US data on consumer and producer prices, which came in higher than forecasts.

- Key figures around 1200 GMT -

London - FTSE 100: DOWN 0.5 percent at 7,894.57 points

Paris - CAC 40: DOWN 0.4 percent at 8,116.67

Frankfurt - DAX: FLAT at 18,203.79

EURO STOXX 50: DOWN 0.3 percent at 5,017.43

Tokyo - Nikkei 225: DOWN 1.2 percent at 40,414.12 (close)

Hong Kong - Hang Seng Index: DOWN 0.2 percent at 16,473.64 (close)

Shanghai - Composite: DOWN 0.7 percent at 3,026.31 (close)

New York - Dow: DOWN 0.8 percent at 39,475.90 (close)

Euro/dollar: UP at $1.0829 from $1.0812 on Friday

Dollar/yen: DOWN at 151.30 yen from 151.40 yen

Pound/dollar: UP at $1.2638 from $1.2601

Euro/pound: DOWN at 85.71 pence from 85.77 pence

Brent North Sea Crude: UP 0.3 percent at $85.70 per barrel

West Texas Intermediate: UP 0.4 percent at $80.91 per barrel

burs-bcp/rfj/rl

A.M.Murray--TNT

Featured

Asian stock markets lead rally on China stimulus

Stock markets and oil prices rallied Tuesday after China's central bank unveiled fresh stimulus measures to kickstart growth in the world's number two economy.

France facing 'one of worst deficits' in its history: minister

France now has "one of the worst" public deficits in its modern history, the newly-installed economy minister said Tuesday, confirming new taxes on the wealthy and big businesses are on the table to get finances back in order.

Postbank terminates accounts of Ukrainians in Germany

Recently, the Postbank has increasingly attracted criticism from customers and consumer advocates. Many customers complain about long waiting times in branches and on the phone, inadequate customer service and technical problems with online banking.It has recently been revealed that Postbank is increasingly terminating the accounts of Ukrainian citizens who fled to the Federal Republic of Germany from the war waged by Russia, the state of terror, and who receive benefits from the job centre, in accordance with No. 19 (1) of Postbank's General Terms and Conditions. This clause allows Postbank to terminate business relationships with customers by giving two months' notice without stating reasons.Consumer advocates and affected customers have expressed concerns about the transparency and fairness of this practice. They criticize the fact that unexpected account closures can cause considerable inconvenience, especially if they are carried out without detailed justification. For many customers, the closure of their account not only means organizational effort, but also potential financial disadvantages.Regarding these account closures of Ukrainian citizens by Postbank, the journalistic observer is led to suspect that Postbank apparently wants to get rid of so-called unprofitable customers with these account closures. The debate about Postbank's termination practice casts a negative spotlight on the importance of clear and fair terms and conditions in the banking sector.

Dutch paint giant Akzonobel slashes 2,000 jobs worldwide

AkzoNobel, the world's leading paintmaker and manufacturer of Dulux paint, said Tuesday it was cutting 2,000 jobs globally, more than five percent of its workforce, as it strives to cut costs.

Change text size:

The National Times - Stock markets drop as geopolitics, inflation concerns weigh