On Asia watch

European stock markets slide

GMT 13:17 2016 Wednesday ,06 January

Arab Today, arab today European stock markets slide

Shanghai chalked up some gains on January 6, as the country's central bank pumped cash
London - Arab Today

European stock markets slid on Wednesday following concerns over China's economy despite fresh stimulus, and on rising geopolitical risk after North Korea's latest nuclear test.

Commodity sector share prices were pulled lower also by sliding oil markets which saw Brent North Sea crude slump below $35 a barrel for the first time in 11 years.

At about 1100 GMT, London's benchmark FTSE 100 index of top companies was down 1.2 percent.

In the eurozone, the Paris CAC 40 index shed 1.3 percent and Frankfurt's DAX 30 lost also 1.3 percent compared with Tuesday's close.

"European markets are trading once again lower... on the back of more disappointing Chinese economic data" and on North Korea, said Markus Huber, trader at City of London Markets.

"News that the Chinese Caixin services PMI came in much lower than expected overnight has stirred fears that in addition to the already struggling manufacturing sector, services are also starting to be in trouble which would certainly not only deepen China's economic woes but also put the likelihood of a sustained economic rebound several months back."
Asian shares mostly fell Wednesday but Chinese markets rallied, with reports Beijing had spent billions buying shares after a more than seven percent decline in the first two trading days of 2016.

The South Korean won sank against the dollar after North Korea announced it had conducted its fourth nuclear test, although there was little wider impact on regional equities.

Shanghai finally chalked up some gains as the country's central bank pumped cash into the beleaguered financial system. Experts said it was used to shore up stocks to avert a repeat of last summer's rout that saw trillions of dollars wiped off valuations.

The People's Bank of China also set its daily yuan reference rate against the dollar at its lowest level in almost five years, according to Bloomberg News.

But analysts warned the moves would cause more problems down the line as China's economy, the world's second biggest and a key driver of global growth, heads for its worst annual performance in a quarter of a century.

There was less reaction to North Korea's announcement that it had tested a hydrogen bomb.
We have more serious issues like the Chinese economy and tension in the Middle East," said Yoshinori Shigemi, a global market strategist for J.P.Morgan Asset Management in Tokyo.

"I think investors will start refocusing on those issues."

China said it "firmly opposes" its neighbour's actions while others blasted it as an intolerable provocation that must be punished.

Several governments promised a firm response as tensions soared again in Northeast Asia, with many calling for further action by the United Nations against the North, which is already subject to an array of international sanctions.

- Key figures around 1100 GMT -

London - FTSE 100: DOWN 1.2 percent at 6,063.8

Paris - CAC 40: DOWN 1.3 percent at 4,477.3

Frankfurt - DAX 30: DOWN 1.3 percent at 10,176

EURO STOXX 50: DOWN 1.2 percent at 3,140

Tokyo - Nikkei 225: DOWN 1.0 percent at 18,191.32 (close)

New York - Dow: UP 0.1 percent at 17,158.66 (close)

Euro/dollar: DOWN at $1.0736 from $1.0750 late Tuesday

Dollar/yen: DOWN at 118.34 yen from 119.06 yen
Source: AFP

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