World Stocks Mixed on Monday 12/17 06:06
World markets were mixed on Monday as British Prime Minister Theresa May
prepares to address the House of Commons over a messy exit deal.
SINGAPORE (AP) -- World markets were mixed on Monday as British Prime
Minister Theresa May prepares to address the House of Commons over a messy exit
deal. Most Asian indexes rose on hopes that the Federal Reserve would
re-evaluate its hawkish stance at a meeting later this week, following signs of
slower global growth.
KEEPING SCORE: Germany's DAX was 0.1 percent lower at 10,856.11 and France's
CAC 40 fell 0.2 percent to 4,842.54. Britain's FTSE 100 index was down 0.3
percent at 6,825.02. Wall Street was set for a flat open. Dow futures added 0.1
percent to 24,147.00 and the broad S&P 500 futures rose 0.1 percent to
2,606.70. December is usually the best month of the year for stocks, because of
a phenomenon known as the "Santa Claus rally" that sees them racking up gains.
But all major U.S. indexes have fallen more than 10 percent from their record
highs, reaching a mark known on Wall Street as a correction.
ASIA'S DAY: Japan's Nikkei 225 index added 0.6 percent to 21,506.88 and the
Kospi in South Korea gained 0.1 percent to 2,071.09. The Shanghai Composite
index edged up 0.2 percent to 2,597.97. Australia's S&P ASX 200 rebounded 1
percent to 5,658.30. Hong Kong's Hang Seng was less than 0.1 percent lower at
26,087.98. Shares were higher in Taiwan and Singapore but fell in Indonesia.
BREXIT TENSIONS: May's address comes after the European Union rebuffed her
request to sweeten a divorce agreement that has been widely criticized at home.
She will likely quash suggestions that the government is planning a second
referendum on whether to leave the bloc. Her supporters have said that another
Brexit vote would exacerbate divisions in the U.K. Britain is scheduled to
leave the EU on March 29 and leaving without a deal could plunge the country
into its deepest recession in nearly a century, its central bank has warned.
FED MEETING: The Federal Open Market Committee is expected to raise its
short-term interest rate --- a benchmark for many consumer and business loans
--- by a modest quarter-point to a range of 2.25 percent to 2.5 percent after a
meeting on Wednesday. This would be its ninth hike since late 2015. The central
bank forecasts three more rate hikes in 2019, but softer global growth could
cause a shift in its hawkish stance. Last week, China announced that its
industrial output and retail sales had slowed in November. France, which is
racked by protests, reported that its purchasing managers' index fell to a
level pointing toward economic contraction. Germany's reading, that still
reflected growth, fell to a four-year low.
ANALYST'S TAKE: "The 'Santa rally' which had been hoped for has proven to be
frustratingly elusive, and now markets are quite happy, if not desperate, for
at least a dovish line to be thrown by the FOMC," Vishnu Varathan of Mizuho
Bank said in a market commentary. Markets are "grasping straws led by hopes
that there will be a material dial back of hawkish bias," he added.
ENERGY: Benchmark U.S. crude added 4 cents to $51.24 a barrel in electronic
trading on the New York Mercantile Exchange. The contract dropped $1.38 to
settle at $51.20 in New York on Friday. Brent crude, used to price
international oils, gained 1 cent to $60.29 a barrel.
CURRENCIES: The dollar was flat at 113.38 yen. The euro strengthened to
$1.1322 from $1.1306. The British pound rose to $1.2599 from $1.2583.