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World markets diverge eyeing French weekend election

Apr 20 2017 13:28

London - Eurozone stock markets rose on Thursday as investors zoned in on the upcoming French presidential election, while London fell further as the pound rose against the dollar.

Around 12:15, London's benchmark FTSE 100 index was down 0.1% compared with the close on Wednesday.

Frankfurt's DAX 30 index gained 0.2% and the Paris CAC 40 won 0.9%.

"The FTSE is weakening once more... as the pound continues its ascent in the wake of (British Prime Minister) Theresa May's decision to call a snap election," said Joshua Mahony, market analyst at IG trading group.

Eyes are on also the first round vote in the French presidential elections this weekend, with a four-way race making it tough to call on who will go into the run-off.

There are fears a win for far-right leader Marine Le Pen, riding a wave of populism, could see the collapse of the eurozone after she said she would withdraw France from the currency bloc.

"World stock markets may be rangebound ahead of the first round of the French presidential election on Sunday, but the euro has hit a three-week high against the US dollar," said Mahony.

Asian markets steadied on Thursday following broad losses the previous two days but they struggled to maintain early momentum as analysts warned caution was prevailing on geopolitical worries and fading hopes for US President Donald Trump's stimulus drive.

Energy firms were among the main laggards, tracking losses in their US counterparts, after a surprise jump in US petroleum inventories sent oil prices skidding almost four percent Wednesday.

Hong Kong added one percent, Sydney put on 0.3% by the close, Seoul jumped 0.5% and Singapore firmed 0.1%.

But Tokyo ended marginally lower, while Shanghai was also flat. Wellington and Taipei slipped.

'Geopolitical angst'

Markets have been rattled in recent weeks by a series of events that upended the optimism that welcomed in the year.

Trump's failure to push through key healthcare reforms last month dealt a huge blow to his chances of passing the tax-cutting, big-spending plan that had helped fan a global rally since his election win in November.

That was followed by a US missile strike on Syria - which hit US-Russian relations - and the ongoing sabre-rattling by North Korea that has fuelled worries about nuclear conflict.

An uninspiring Federal Reserve report Wednesday on the US economy also failed to provide any lift.

"Geopolitical angst, a faltering US economy and the UK snap election are consuming investors mindsets," said Stephen Innes, senior trader at Oanda trading group.

In view of the many uncertainties, investors were reluctant to take any risks, he said.

Crude prices meanwhile rebounded Thursday, boosted by the oil minister of Saudi Arabia saying an output cut among major producers might need to be extended past its June-end cut-off in order to properly deal with a global glut.

But investors kept away from big-name companies after the US government on Wednesday announced a increase in petroleum stockpiles, which fuelled worries about demand as the country heads into the crucial holiday season when Americans take to the roads.


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equities  |  markets  |  global markets

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