European Shares Seen Tad Lower At Open As Rate Worries Persist

European Shares Seen Tad Lower At Open As Rate Worries Persist

September 28, 2023

European stocks are seen opening lower on Friday after Wall Street tanked in a broad selloff overnight led by technology stocks.

Asian markets recouped early losses, tracking gains in U.S. stock futures. Chinese and Hong Kong stocks were seeing strong gains after reports of a slew of regulatory measures to support businesses.

The Japanese yen slipped after the Bank of Japan maintained super-low interest rates and left its yield control policy unchanged, offering no clear sign of a shift in its policy stance.

Gold edged higher, defying strength in the dollar index and a jump in Treasury yields.

The dollar held near six-month highs and benchmark 10-year Treasury yields climbed a 16-year high on prospects of higher-for-longer U.S. interest rates.

After the Fed signaled that a further increase was likely later this year, two former Federal Reserve policymakers said the U.S. central bank is unlikely to achieve a soft landing of the economy.

Oil prices climbed in Asian trading, as concerns that a Russian ban on fuel exports could tighten global supply outweighed worries about slower demand due to tighter monetary policies in the United States and Europe.

Flash Purchasing Managers’ survey results from the euro area and the U.K. are due later in the session, headlining a busy day for the European economic news.

U.S. stocks suffered their biggest drop in six months overnight, given uncertainty about the Fed’s monetary policy direction.

Data showed first-time weekly claims for U.S. unemployment benefits unexpectedly fell to a seven-month low, adding to the concerns about interest rates.

The tech-heavy Nasdaq Composite plummeted 1.8 percent to reach its lowest closing level in over three months, while the S&P 500 gave up 1.6 percent and the Dow declined 1.1 percent.

European stocks closed lower on Thursday as traders digested a raft of interest-rate decisions from central banks in England, Turkey, Sweden, Switzerland and Norway.

The pan European STOXX 600 fell 1.3 percent as the Bank of England held rates steady for the first time since November 2021.

The German DAX lost 1.3 percent, France’s CAC 40 plunged 1.6 percent and the U.K.’s FTSE 100 dropped 0.7 percent.

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