Global equity rally suspended as China’s assets weigh and US data looms

Hong Kong / London — The recent rise in stock prices to record levels lost momentum on Friday, ahead of new uncertainties in China’s real estate sector and US employment data scheduled for later that day. The market paused in a breathtaking manner.

The US dollar rose against the pound sterling after the Bank of England (BoE) missed a chance to raise interest rates on Thursday and confused the market.

MSCI’s global share price has fallen 0.07%, indicating that central banks around the world could end their four-day record in a week ahead of hawkish surprises. ..

Europe’s index was flat after MSCI’s widest non-Japanese Asia-Pacific index fell 0.23%, but Japan’s Nikkei Stock Average fell 0.7% from last month’s highs due to disappointment of manufacturers’ earnings. Did.

US equity futures showed confidence in the economic recovery expected to be shown by October salary data scheduled for the second half of the day, with the S & P 500 e-minis rising 0.05%.

Federal Reserve Chairman Jerome Powell said he wouldn’t rush to raise borrowing costs, but Wednesday the Federal Reserve finally curtailed a major asset purchase program. Even after announcing the launch of the Fed, profits were made.

Stefan Hofer, Chief Investment Strategist at LGT in the Asia Pacific region, said:

“It was really professional communication and was handled very well.”

Hofer said the focus will be on US employment data for the next few months to influence the Fed’s future decisions.

In Asia, Hong Kong is squeezing the regional index, falling 1.25% as the heavyweight and interest-sensitive HSBC fell 3.6% in response to BoE dovish calls and concerns over real estate stocks.

The day after the company announced that its subsidiary had missed payments for its wealth management products, the latest sign of a deepening liquidity crisis in China’s real estate sector, stock trading by Chinese developer Kaisa Group Holdings was suspended.

The index that tracks developers in mainland China, which is listed on Hong Kong, fell 2.8%, and China’s land real estate index fell 2%.

Exchange rate
A woman wearing a face mask is reflected in the electronic exchange rate in downtown Seoul, South Korea on November 5, 2021. (Lee Jin-man / AP Photo)

In a broader sense, Shanghai stocks fell 1% and China’s best stocks fell 0.5%.

Misleading signal

Investors were happy with the Fed’s communications, but others felt they were misdirected by BoE policy makers.

On Friday, the pound fell 1.36% the day before following a central bank decision and was injured at a low of nearly a month.

The dollar index was 94.327 at the end, seeing a 12-month high in October after the US currency also rose to the euro.

Germany’s 10-year bond yields appeared to have fallen 15 basis points, the largest weekly decline since June, as the central bank left the policy rate unchanged.

Oil prices rose and partially after OPEC + producers rejected US calls to increase supply and instead maintained plans for a gradual recovery of production stopped by the coronavirus pandemic. Showed recovery.

US crude oil increased 1.24% to $ 80 a barrel and Brent crude oil increased 1% to $ 81.39 a barrel, following reports that Saudi Arabia’s production exceeded 10 million barrels per day for the first time during COVID. Recorded the lowest value a day ago. -19 Pandemic.

Spot gold rose 0.3% as lower yields supported interest-free assets.

Arun John and Lawrence White