Global Stock Markets Fizzle at End of Upbeat Trading Week

on Oct 15, 2012

Most global stock indices pared earlier gains and ended last week on a sour note as worries about weak global growth and its impact on corporate profitability offset a handful of upbeat corporate reports and positive US consumer confidence data, The Financial Times reported on 12 October 2012.

**US Stocks on a Downward Slide Despite Positive Data**
The Thomson Reuters and University of Michigan preliminary October consumer sentiment index had been estimated to slide to 78.0 from 78.3 in September, but in fact rose to 83.1 — its highest level in five years. The unexpected jump in US consumer confidence caused short-term optimism amongst investors before the gains were pared at the end of the week.

On Friday (12 October 2012), the Standard & Poor 500-stock index closed down 4.25 points at 1,428.59. The Dow Jones industrial average edged up 2.46 points to close at 13,328.85, giving up an earlier gain of 75 points. The Nasdaq Composite lost 5.30 points to close at 3,044.11. Overall, US stocks ended Friday’s session 0.3 per cent lower, wrapping up a 2.2 per cent decline in the week.

!m[Following Positive US Data, Indices Displayed Optimism, But Stocks Lost Steam on Friday](/uploads/story/577/thumbs/pic1_inline.png)The pullback on Wall Street came as traders remained concerned over the prospects for the rest of the global economy and how this would be shown affecting company earnings and forecasts during the US third-quarter reporting season.

On Friday, two of the largest US financial institutions released reports which showed strong performance in mortgages. Yet the results from JP Morgan (NYSE:JPM) and Wells Fargo (NYSE:WFC) have not been particularly well-received. Investors’ negative reaction added to a sense of increasing pessimism following downbeat statements from the likes of energy group Chevron (NYSE:CVX), engineer Cummins (NYSE:CMI), aluminium producer Alcoa (NYSE:AA) and chipmaker Advanced Micro Devices (NYSE:AMD).

**Europe in Line with Losses**
European stock markets also retreated as investors wound down a week once more overtaken by Spanish debt strains and weak outlooks for the global economy. In Frankfurt the DAX 30 fell by 0.68 per cent to 7,232.49 points, while in Paris the CAC 40 gave up 0.72 per cent to 3,389.08 points. Milan dropped 0.78 per cent and Madrid fell 1.06 per cent.
The UK markets also finished lower on Friday. London’s FTSE 100 of top companies fell 0.6 per cent, to close at 5,793.3, while the FTSE 250 lost 0.5 pr cent, to close at 11,838.3. Miners weighed on the indices the most, with Evraz (LON:EVR) and Kazakhmys (LON:KAZ) leading the pack with losses of 5.4 per cent and 4.1 per cent, respectively. Peers Antofagasta (LON:ANTO), Anglo American (LON:AAL) and Rio Tinto (LON:RIO) fell between 1.6 per cent and 3.6 per cent, on lower demand outlook.
**Asian Markets Mixed**
Shares in Indian software group Infosys (BOM:500209) slumped on Friday after revenue forecasts were shy of analysts’ expectations, contributing to a 0.7 per cent drop for India’s Sensex. The dip however was in contrast to much of Asia as the region welcomed efforts by Japan and China to reduce tensions over a territorial dispute that has been hurting the two countries’ economic relations.
Tokyo’s Nikkei 225 was down just 0.2 per cent, while Hong Kong’s Hang Seng added 0.7 per cent and the Shanghai Composite rose 0.1 per cent ahead of the release of major Chinese economic indicators next week.


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