Mixed US economic data prompted another round of sell-off in global equity markets

Thursday, December 12, 2013

European equity markets retreated on Thursday, as weaker than expected economic data from the US and Eurozone hurt market sentiment and prompted investors to lock in recent profits. CAC, DAX, IBEX and London fell sharply between 0.43% and 0.96%, while US dollar found some upside momentum and corrected higher, with the USD index trading above 80.0 area.

On the macroeconomic front, retail sales jumped in November by 0.7%, showing its largest increase in five months, supported by the Thanksgiving holiday season. However, weekly jobless claims rose by 68,000 to a seasonally adjusted 368,000 last week, while import prices fell by 0.6% in November.

In corporate news, Hilton Worldwide Holding opened trading today in New York Stock Exchange at $21.30, above the IPO price of $20. In London, Sports Direct plunged by 12.6%, showing its biggest one-day decline in over two years after missing analysts’ expectations in its full-year earnings targets.

In addition, miners and energy stocks dragged the London equity market lower. Fresnillo, Vedanta, Randgold and BHP Billiton fell between 1.7% and 5.23% amid weaker prices in precious and base metals.

Tomorrow, the release of the Eurozone’s unemployment data as well as Producer prices data and PPI inflation in the US could provide further signs regarding the current economic conditions and prospects.

It has been a fairly volatile week for the global equity markets, following mixed economic data, which has failed to provide some clear direction. In the meantime, the softer US dollar currently provides some support to prices, while all eyes remain on the crucial FOMC meeting next week. 

More from: Myrto Sokou