China stock slump weighs on global markets
European stock markets were weighed down Thursday by the earlier slump in China’s main stock market to its lowest level since September. Trading levels were relatively modest, though, with U.S. markets closed for the Thanksgiving holiday.
In Europe, Britain’s FTSE 100 fell 0.1% to 7,410, while Germany’s DAX dipped 0.2% to 12,995. France’s CAC 40 outperformed its counterparts, trading up 0.6% at 5,384.
Chinese stocks fell sharply on reports that the government is moving to rein in online lending firms. Investors also pulled back after Hong Kong’s Hang Seng index hit a 10-year high Wednesday to take profits. The Shanghai Composite Index sank 2.3% to 3,351.92, its lowest level since September, while the Hang Seng slumped 1% to 29,707.94.
“Sentiment in China was dented by Beijing halting approvals for all new online lending companies to curb a credit bubble,” said analyst Mike van Dulken of Accendo Markets.
Other Asian markets finished generally flat. South Korea’s Kospi finished 0.1% lower at 2,537.15, and Australia’s S&P/ASX 200 finished unchanged at 5,986.20. Stocks in Singapore and other Southeast Asian countries were mixed. Japan was closed for a holiday.
The 19-country eurozone is set for its best quarterly performance since early 2011, according to a closely watched survey Thursday, the latest sign that a robust economy has gained further momentum heading into the year’s end. Financial information company IHS Markit said its purchasing managers’ index — a broad gauge of business activity across the manufacturing and services sectors — rose to 57.5 points in November from 56 the previous month. Anything above 50 indicates an expansion, and the index now stands at its highest level since April 2011.
Minutes of the Fed’s last meeting that ended Nov. 1 showed that most officials generally think it soon will be time for another increase in the Fed’s key interest rate. A few Fed leaders think rates should stay where they are until there is more evidence inflation is rising, showing concerns that the U.S. inflation rate is falling short of expectations despite the jobless rate falling to the lowest level in nearly 17 years. But the minutes did not change expectations of a December rate hike, analysts said.
The price of oil retreated after a jump on reports that key oil producers might extend the cuts in production they made at the start of this year. U.S. crude fell 20 cents to $57.82 per barrel on the New York Mercantile Exchange while Brent crude, used to price international oils, lost 31 cents to $63.01 per barrel in London.
The euro rose 0.2% to $1.1844 while the dollar was unchanged at 111.21 yen.
