A roundup of trading on major world markets:
NEW YORK – Wall Street has closed lower as a bounce in Apple failed to offset concerns that the US Federal Reserve could raise interest rates sooner than later.
The timing of future Fed rate hikes in the face of a sluggish economy is a major focus among stock investors who have benefited from historically low borrowing costs since the 2008 financial crisis.
The Dow Jones industrial average and the Nasdaq Composite traded higher for much of Monday’s session but they made a pronounced dip in the final few minutes.
San Francisco Fed President John Williams and his St Louis counterpart, James Bullard, both struck hawkish tones in separate appearances on Monday.
“The market needs to be coddled and gently eased into a slightly higher interest-rate environment, and that appears to be what the Fed is doing,” said Tim Ghriskey, chief investment officer of Solaris Group in Bedford Hills, New York.
“Rates need to normalise and the Fed needs to give itself room to lower again in the event of another financial crisis,” Ghriskey said.
The Dow Jones industrial average declined 0.05 per cent to end at 17,492.93 points and the S&P 500 lost 0.21 per cent to 2,048.04.
The Nasdaq Composite dipped 0.08 per cent to 4,765.78.
LONDON – European stocks have see-sawed while oil, the greenback and bond yields all fell as investors began the week cautious about prospects that US interest rates could soon be raised.
The FTSEuroFirst 300 index of leading shares, Germany’s DAX and France’s CAC 40 all fell as much as one per cent in early trade but then rebounded into positive territory.
Shares in German drugs and chemicals group Bayer AG were among the most notable decliners, however, down as much as 3 per cent after it unveiled a $US62 billion ($A85.87 billion) bid for US seeds company Monsanto Co.
“The Fed’s decision to convey a much firmer hawkish tone has certainly woken people up to the possibility that rates could rise over the summer and with that, the markets have perked up as well,” said Craig Erlam, senior analyst at Oanda.
Purchasing managers index data showed that eurozone business growth slipped in May to a 16-month low, the latest evidence to suggest a strong acceleration in growth in the first three months of the year was only temporary.
Markit’s flash Composite Purchasing Managers’ Index, one of the first growth indicators in a month, edged down to 52.9 from April’s 53.0, essentially stable but still the lowest since the start of 2015.
Germany’s private sector growth accelerated in May to the highest level so far this year, but activity elsewhere failed to keep pace.
London’s FTSE 100 close down 19.89 points, or 0.32 per cent, at 6,136.43, while the DAX was down 73.73 points, or 0.73 per cent, at 9,842.29.
HONG KONG – Asian shares mostly rose, with MSCI’s broadest index of Asia-Pacific shares outside Japan up 0.3 per cent, but Japan’s Nikkei ended down 0.5 per cent.
The Markit/Nikkei flash Japan manufacturing PMI showed Japanese manufacturing activity contracted at the fastest pace in more than three years in May, while a slump in Japanese trade and reports that Japan’s sales tax increase would indeed be implemented all weighed on the Nikkei.
Markets have started to entertain the prospect of a near term US rate lift after last week’s release of Fed meeting minutes showed that policymakers weren’t shying away from raising interest rates as early as June.
The yen gained most among the major currencies, supported by the ballooning Japanese trade surplus. The US dollar was last down 0.6 per cent at Y109.50, and the euro was steady at $US1.1217.
Japan’s Nikkei 225 fell 81.75 points, or 0.49 per cent, to 16,654.60, while the Hang Seng fell 43.17 points, or 0.22 per cent, to 19,809.03.
But Shanghai gained nine points, or 0.29 per cent, to 3,087.22.
WELLINGTON – The S&P/NZX50 Index dropped 2.09 points, or 0.03 per cent, to 6,907.7.