A roundup of trading on major world markets:
NEW YORK – Wall Street has fallen sharply as investors took gains off the table following a recent rally and ahead of an upcoming quarterly reporting season that is expected to reveal sharply lower earnings.
As S&P 500 companies hand in their first-quarter reports over the next several weeks, average earnings are expected to fall 7.1 per cent from the year-ago period, with the energy sector weighing most heavily, according to Thomson Reuters data.
“General consensus is that we’re going to see declining earnings,” said Peter Jankovskis, co-chief investment officer at OakBrook Investments LLC in Lisle, Illinois.
“The big question is how big are those declines going to be?”
International Monetary Fund Managing Director Christine Lagarde on Tuesday warned of increasing risks to global economic growth unless policymakers take stronger measures.
Data showed that the US trade deficit widened more than expected in February, while another report showed services sector activity rose in March.
The Dow Jones industrial average dropped 0.75 per cent to end at 17,603.32 and the S&P 500 lost 20.96 points to 2,045.17.
The Nasdaq Composite fell 0.98 per cent to 4,843.93.
LONDON – Britain’s top share index has closed lower after dipping to a three-week low, with commodities-related stocks coming under pressure from falls in oil and metals prices.
The blue-chip FTSE 100 index ended 1.2 per cent weaker at 6,091.23 points after hitting an intra-day trough of 6,061.85, the lowest since early March.
The index was dragged down by a 3.1-per cent fall in the UK mining index and a 2.1-per cent fall in the oil and gas sector.
“A three-week low in the price of oil goes some way to explaining deteriorating market sentiment,” said Jasper Lawler, analyst at CMC Markets.
“Some heavy declines in industrial metal prices over the past three days are taking a toll on the UK-listed mining companies.”
HONG KONG – Asian shares and other riskier assets skidded, pressured by slumping crude oil prices and mixed messages from Federal Reserve policymakers on the outlook for US interest rate rises.
Oil prices continued to drop after shedding more than two per cent overnight, as investors doubted that oil producing countries would freeze output to address a global glut.
MSCI’s broadest index of Asia-Pacific shares outside Japan was down 1.3 per cent. Japan’s Nikkei index fell 2.4 per cent to an eight-week closing low, as the yen rallied, hurting exporters.
“Investors are concerned that Japanese companies are losing their ‘weak-yen appeal’,” said Kazuhiro Takahashi, equity strategist at Daiwa Securities.
“Many people are thinking it would be difficult for exporters to forecast on-year gains in their earnings for this fiscal year.”
Chinese shares bucked the trend, closing up 1.3 to 1.4 per cent as trading resumed after a market holiday.
WELLINGTON – The NZX 50 fell 27.79 points, or 0.4 per cent, to 6,715.81.
