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Asia Markets Follow Wall Street’s Rise, but Europe Is More Cautious
Wall St. Stocks Drop, Riding Roller Coaster Back Down After Best Day Since ’09
(about 3 hours later)
HONG KONG — Global markets surged out of their holiday doldrums with big increases on Thursday driven by Wall Street’s gains, but ran out of steam in Europe.
Stocks in the United States fell at the start of trading on Thursday, as Wall Street’s roller-coaster ride continued. The losses came a day after the S&P 500 had its best one-day performance since 2009.
Market indicators suggested the positive vibes were unlikely to last. Futures that track the performance of stocks in the United States suggested New York markets would open lower on Thursday.
■ The rise Wednesday had followed reports of strong holiday-shopping sales, a jump in crude oil prices and reassuring words from the White House about the Federal Reserve.
European markets opened modestly higher after the Christmas break and many sank through the morning.
[Read more about the rally on Wednesday, which yielded a record gain for the Dow Jones industrial average.]
Japan’s 3.9 percent rise on Thursday led the global gains, which followed a nearly 5 percent rise on Wall Street on Wednesday. Many markets in Asia followed to a lesser extent. They were responding to a report that holiday sales were strong, as well as efforts by the White House to assure investors that President Trump did not intend to try to fire Jerome H. Powell, the Federal Reserve chairman, because he disagreed with the Fed’s monetary policies.
■ But the S&P 500 is still on track for its worst annual performance in a decade, and any hope that investors are ready to set aside various factors that have put them on edge — including trade tensions between the United States and China; a global slowdown in economic growth; President Trump’s simmering antipathy toward Jerome H. Powell, the Fed chairman — vanished as major indexes fell to open the day on Thursday.
If the markets did not quite follow Wall Street’s rise all the way, it might have been because signs of trouble still loom. Chinese economic officials on Thursday said industrial profits in November declined for the first time in three years, a reminder that growth in the world’s second-largest economy after the United States continues to slow. Markets in China and Hong Kong bucked the global trend and finished lower.
[Read more about investors’ biggest concerns, and about how technology stocks fell into a bear market last week.]
In Japan, the Nikkei 225 stock index rose 3.9 percent after dipping into bear-market territory — meaning shares had fallen 20 percent or more from their high for the year — earlier in the week.
■ The drop on Wall Street came after market declines across Europe. The Euro Stoxx 50, a measure of blue-chip European companies, was down 1 percent by the early afternoon. Britain’s FTSE 100 was off 1.27 percent, France’s CAC 40 had lost 0.34 percent and the Dax in Germany was 2.09 percent lower.
China’s Shanghai Composite Index fell 0.6 percent, while Hong Kong’s Hang Seng Index fell 0.7 percent.
[It’s not just the stock market that’s flashing warnings. The bond market is too.]
South Korea’s Kospi index was flat, and Taiwan’s Taiex rose 1.7 percent.
■ Asian markets were mixed on the day, with Japan’s Nikkei 225 ending trading around 3.9 percent higher after dipping into bear-market territory — at least 20 percent off its recent peak — earlier in the week. China’s Shanghai Composite Index fell 0.6 percent, Hong Kong’s Hang Seng Index dropped 0.7 percent, South Korea’s Kospi index was flat, and Taiwan’s Taiex rose 1.7 percent.
In Europe, Britain’s FTSE 100 index opened 0.3 percent higher, but it was 0.5 percent lower by midmorning. France’s CAC 40 rose the most among the major indexes, gaining 1.1 percent at the open, but it turned flat by midmorning. The Dax in Germany edged 1.5 percent down through the morning.
One likely cause for concern was Chinese officials’ announcement on Thursday that industrial profits had declined in November for the first time in three years, a reminder that the growth of the world’s second-largest economy continues to slow.
The market open in the United States will be closely watched to see how long-lived the gains from Wednesday will be. On Wednesday, the S&P 500 rose nearly 5 percent, recording its best day since 2009, and the Nasdaq and the Dow Jones industrial average made similar gains.
Analysts said the economy in the United States remained strong and corporate profit growth healthy, but fears remain that the Federal Reserve’s decision to continue raising interest rates could affect prospects.
