Asia markets pick up but global fears remain
October 17, 2014
With nerves calmed by the latest figures from Washington, the dollar and euro ticked up slightly against the yen while oil prices also enjoyed a minor rally.
Hong Kong rose 0.35 percent, Tokyo and Seoul were flat, Sydney added 0.49 percent and Shanghai was 0.10 percent higher.
Shares around the world have been hammered in recent weeks by worries about the global economy as the eurozone, China and Japan struggle to reignite growth.
Those fears increased this week when the United States, which has been the only economy showing signs of strength, came in well below expectations.
However, there was some relief Thursday when the Department of Labor said initial jobless claims for the week ending October 11 fell to their lowest level since 2000. Also, the Federal Reserve said industrial production rebounded in September from an unexpected drop in August.
The news helped Wall Street reverse morning losses, although the three main indexes still provided an anaemic lead. The Dow dipped 0.15 percent, while the S&P 500 and Nasdaq were marginally higher.
It also helped the dollar and euro pick up against the yen, which is considered a safe haven in times of turmoil.
In morning trade the dollar bought 106.36 yen, compared with 106.33 yen in New York Thursday.
The euro bought $1.2812 and 136.16 yen against $1.2809 and 136.19 yen.
The dollar has fallen in value against the yen and the euro since the Fed earlier this month indicated it will likely refrain from hiking interest rates soon owing to worries about overseas economies.
"Any delay in expected monetary normalisation by the Fed will indeed hurt the dollar," said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange.
"However, the dollar is likely to remain underpinned by the view that America´s economy remains the ´cleanest shirt in the hamper´."
The euro held up despite renewed concerns about Greece after the government hinted that it might exit a four-year-old bailout early as it looks to free itself of strict controls attached to it.
Analysts have said investors fear Athens will not be able to stand on its own two feet if it goes ahead with the plan, with the country´s main stock market plunging and borrowing costs rising.
The issue has stirred memories of the dark days of the eurozone debt crisis that sent global markets spiralling downwards and fanned talk of a break-up of the economic bloc.
World oil prices edged up. US benchmark West Texas Intermediate (WTI) for November delivery was up 59 cents to $83.28 -- the contract has rallied after briefly falling below $80 a barrel Thursday for the first time since June 2012. Brent crude for December delivery climbed 77 cents to $86.59.
Gold was at $1,238.00 an ounce against $1,241.90 late Thursday. (AFP)
