With the close of Asian markets, Japan’s Nikkei 225 and Topix indices were down by 0.6% and 0.3% respectively. The former managed to close in the green only once this week, specifically yesterday when it rose by 0.2%. Australia’s S&P/ASX 200 was 0.3% lower. The Shanghai Composite was flat with Hong Kong’s Hang Seng a notable gainer, rising by 0.5%.
North Korea will tomorrow celebrate its founding day and the possibility of another missile test is likely to have weighed on sentiment during today’s trading. Should a launch take place, as reports have suggested, then it is almost certain to affect appetite for risk as markets open for trading on Monday next week.
The picture in Europe was broadly negative during early hours of trading with all major indices in the continent being in negative territory. The FTSE 100, DAX and CAC 40 were down by 0.3%, 0.2% and 0.5% respectively. The pan-European Stoxx 600 traded 0.4% lower.
The European Central Bank yesterday completed its two-day meeting on monetary policy. Although ECB President Mario Draghi did attempt to talk down the eurozone’s common currency, his comments on this front were viewed on the “soft” side, allowing the euro to rally to a more than two-and-a-half-year high versus the greenback. At its highest, the pair today eyed the 1.21 level. A strong euro is perceived as detrimental to European exporters and is viewed as one of the reasons for today’s stock market declines.
Financials were in focus leading up to the ECB meeting. Stoxx 600 Banks was last 0.1% up after finishing lower in all four preceding sessions during the week. Barclays and Banco Santander were notable gainers, edging higher by 1.1% and 1.2% respectively. The former was one of the best performing stocks within the FTSE 100 and the latter the best performing stock within Spain’s IBEX 35. Yesterday evening, investment bank Morgan Stanley upgraded Santander’s rating to “overweight”. The biggest riser within Stoxx 600 Banks was diversified investment services firm Natixis – last up by 1.7%. Broker Kepler Cheuvreux today raised its price target for the company.
UK mid-cap Greene King plummeted, being last down by 12.2% to render itself Stoxx 600’s worst underperformer. The pub operator reported a fall in revenues over the summer and issued a negative outlook.
Futures markets were last projecting a lower open on Wall Street. Dow Jones contracts were 0.4% down, while S&P 500 and Nasdaq 100 equivalents were trading 0.3% down. Among others, insurance companies will be in focus in the US in the aftermath of powerful hurricanes hitting the nation.