European markets down despite US rate cut
European markets were not impressed by yesterday’s rate cut in the US, dropping again on Wednesday. The FTSE Eurofirst 300 was 2.8 percent lower to 1,267.8. The CAC-40 fell 4.25 percent to 4,636.76 and Madrid’s IBEX was down 4.56 percent to 12,254.6 while the Dax dropped 4.88 percent to 6,439.21. Meanwhile in London, the FTSE 100 was down 2.28 percent to 5,609.3 while the FTSE 250 was 1.24 percent lower to 9,493.7.
Most Asia-Pacific equities markets were higher on the session. Taiwan’s Taiex index was the major exception, dropping 2.29 percent to 7,408.4. In South Korea, the Kospi index was 1.21 percent higher to 1,628.42. The Shanghai Composite was 3.14 percent higher to 4,703.05 while the FTSE Straits Times Index added 4.08 percent to 2,983.62 in Singapore. Australian markets ended 12 consecutive days of declines when the Sydney Ordinaries gained 4.28 percent to 5,445.6 and the S&P/ASX200 jumped 4.35 percent to 5,412.3. In India, the Sensex was 5.17 percent higher to 17,594.07. Hong Kong’s Hang Seng index soared 2,332 points, or 10.72 percent, Wednesday to 24,090.17. In Tokyo, the Nikkei 225 was up 3.04 percent to 12,829.06 while the Topix index added 2.46 percent to 1,249.93 and the Mothers market gained 1.92 percent to 619.85.
Wall Street was lower in early afternoon trade. The Dow Jones Industrial Average was down 1.44 percent to 11,798.86, up from earlier lows but still down substantially. Meanwhile, the Nasdaq Composite was 2.8 percent lower to 2,227.99 and the S&P 500 had dropped 1.74 percent to 1,287.76.
Oil and grains prices were lower while precious metals prices were mixed on the session, with all markets unsettled by concerns about the economy.
The euro was weaker versus the US dollar on sentiment that the European Central Bank will be forced to cut interest rates this year, while both the yen and the Swiss franc were up against all major currencies as investors fled risk.