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World stocks slip on China downgrade, ahead of Fed minutes

World stocks inched lower on Wednesday after China’s sovereign credit rating was downgraded and as investors eyed a pause in Wall Street’s four-day winning streak, the longest in over three months.

The dollar and U.S. bond yields were steady as investors awaited the minutes from the Federal Reserve’s last policy meeting. An interest rate rise next month is now 75 percent priced in, according to futures market pricing.

Oil wiped out earlier gains ahead of OPEC’s meeting on Wednesday at which the cartel is expected to lead an output cut extending into the first quarter of next year.

Europe’s index of leading 300 shares was flat on the day around 1,540 points, MSCI’s global share index was down 0.1 percent and U.S. stock futures pointed to a fall of up to 0.1 percent at the open on Wall Street.

Markets were mostly quiet on Wednesday, lacking impetus from fresh economic or corporate drivers. Investors shrugged off the rise in Britain’s terror threat level to maximum in the wake of Monday’s attack in Manchester, and the slide back in market volatility helped put a floor under stocks.

“China’s debt downgrade by Moody’s has made investors a little less sure of themselves,” said Jasper Lawler, senior market analyst at London Capital Group.

“A little uncertainty before what could be an important update on the path of U.S. interest rates via Fed minutes is also capping some of the enthusiasm,” he said.

Germany’s DAX and France’s CAC 40 were both down 0.2 percent, and Britain’s FTSE 100 was up 0.3 percent to within 20 points of last week’s record high of 7,533.70 points.

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