LONDON (Reuters) - For world markets, the period between Thanksgiving and the year-end often starts to give clues to new year trends – albeit complicated in recent years by December interest rate rises from the U.S Federal Reserve, most likely again next month.
On that basis, you might watch the recent wobbles in Chinese stock markets and in inflated tech sector stocks late last week and again on Monday for indications of concern. After early gains on the back of Friday’s new records on Wall St, Asia stocks turned tail half way through the day on Monday, with Shanghai stocks ending down almost 1 percent and Seoul’s Kospi down as much as 1.4 percent. Tokyo and HK ended in the red also, with semiconductor firms in the fray amid speculation about a pullback in business there after a blockbuster third quarter.
Elsewhere on major markets, euro/dollar slipped back after Friday’s surge above $1.19 to its highest since September on a series of positive economic survey surprises at the end of last week that show the German and broader euro zone economy in rude health in November and as Germany’s post-election political hiatus tended toward the reformation of a grand coalition between Chancellor Angela Merkel’s conservative and the main social democrat opposition.
The South African rand fell 1.6 percent against the dollar to a one-week low and local government bonds weakened after S&P Global on Friday downgraded the country’s local currency debt to junk and Moody’s placed the country on review for a downgrade. Moody’s has South Africa’s foreign and local currency debt on the lowest investment grade rung.
Both cited the deterioration in the country’s economic growth prospects and public finances. The finance ministry said it would use its annual budget next year to outline decisive policy to strengthen its fiscal framework.
Sterling was steady to firmer ahead of the presentation of the UK government’s post-Brexit industrial strategy, while hopes of a breakthrough in Brexit talks between the UK and the European Union snagged on a lack of progress on what happens to the Irish border. European shares opened lower.
The seemingly unstoppable spiral higher in bitcoin, meantime, has seen the cryptocurrency within a few percent of $10,000 level – a move of 223 percent since the lows of September alone.
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Editing by Toby Chopra