Shares in Europe were mostly lower Friday after mixed trading in Asia following a broad retreat on Wall Street driven by worries over interest rates.
Germany’s DAX shed 0.3% to 15,526.55 and the CAC 40 in Paris sank 0.7% to 7,163.97. Britain’s FTSE 100 was up 0.3%, at 7,702.08.
The future for the S&P 500 edged 0.1% higher while that for the Dow industrials was virtually unchanged. On Thursday, the S&P 500 lost 1.6% for its worst day since March. The Dow Jones Industrial Average dropped 1.1% and the Nasdaq composite lost 1.8%.
Shares in Chinese markets surged late Friday, with Hong Kong’s benchmark up more than 2% following a report by Bloomberg saying that regulators are considering lifting limits on share ownership by foreigners.
The report cited unnamed people “familiar with the matter” who said Beijing is considering relaxing rules that cap foreign ownership in domestic publicly traded firms to help lure investors to the local market.
The report could not be immediately confirmed. Local media cited the Bloomberg report, which comes as capital outflows have increased amid uncertainty over the outlook for the Chinese economy and for foreign investment in the communist-ruled country.
Meanwhile, the Chinese central bank issued a list of 10 “systemically important” banks, including the biggest state run banks, and said it would step up supervision of those financial institutions.
The Hang Seng in Hong Kong gained 2.3% to 18,057.45 while the Shanghai Composite index advanced 1.6%, to 3,132.43.
Tokyo’s Nikkei 225 fell 0.5% to 32,402.41 as Japan’s central bank kept its benchmark interest rate at minus 0.1%, as expected. In a statement, it pledged flexibility in its policies.
“Japan’s economy is likely to continue recovering moderately for the time being, supported by factors such as the materialization of pent-up demand” after the pandemic, the Bank of Japan said in a policy statement.
It forecast that even though inflation has surpassed its 2% target, it is likely to subside. That suggests the central bank is still wary of falling back into deflation, or chronically falling prices that can sap economic growth.
In Seoul, the Kospi shed 0.3% to 2,508.13.
Australia’s S&P/ASX 200 slipped 0.2% to 7,049.20 even as the government reported a $14.2 billion budget surplus for the last fiscal year. It was the first time the nation’s books were balanced in 15 years, with officials citing low unemployment and high prices for the country’s commodities, including iron ore, coal and gas.
On Thursday, Wall Street fell sharply in an ugly day for stocks worldwide.
That followed a drop of 0.9% from Wednesday after the Federal Reserve indicated it may cut interest rates next year by just half of what it had earlier predicted. The Fed has already hiked its main interest rate to levels unseen since 2001, which helps slow inflation but at the cost of hurting investment prices.
High-growth stocks are typically among the hardest hit by high rates, and Big Tech stocks took the brunt of the pain for a second straight day. Amazon fell 4.4%, Nvidia dropped 2.9% and Telsa lost 2.6%.
Cisco Systems also took a hit after it said it would buy Splunk, a cybersecurity company, for roughly $28 billion in cash. Cisco fell 3.9%, while Splunk jumped 20.8%.
On the winning side of Wall Street, FedEx rose 4.5% after it reported stronger profit for the latest quarter than analysts expected.
Stock prices tend to fall when rates rise because stocks are riskier investments. Why chance their big swings when Treasurys are paying higher interest?
In other trading Friday, U.S. benchmark crude oil gained 58 cents to $90.21 per barrel in electronic trading on the New York Mercantile Exchange. It lost 3 cents on Thursday.
Brent crude oil, the pricing basis for international trading, picked up 44 cents to $93.74 per barrel.
The U.S. dollar rose to 148.29 Japanese yen from 147.58 yen. The euro slipped to $1.0648 from $1.0661.