Stock markets diverge as traders weigh future Fed cuts / Photo: © AFP
Stock markets diverge as traders weigh future Fed cuts
Stock markets diverged on Thursday as investors digested US inflation data that supported the case for another interest rate cut next month, while worries over Donald Trump's presidency clouded optimism.
Bitcoin was trading above the $90,000 level but below Wednesday's record of $93,462.
Observers are expecting it to soon top $100,000 following pro-crypto pledges from the US president-elect.
US inflation data showed that consumer prices rose in line with forecasts, cementing expectations that the Federal Reserve will cut interest rates again next month.
"Inflation is moving sideways on a year-on-year basis, but there is nothing in (the) report that would alarm the Fed," said Bank of America Global Research in a report.
"A 25-basis-point cut in December firmly remains our base case."
Still, there are worries about the impact of Trump's plans to slash taxes, ease regulations and impose huge tariffs on imports -- particularly from China -- which observers say could reignite inflation.
Some players are now scaling back their bets on how many cuts the Fed will make in 2025 in response to that.
Tokyo, Hong Kong and Shanghai all fell on Thursday as concerns over another possible China-US trade war, and Beijing's economic woes, weighed on Asian markets.
European markets fared better, ahead of data on the health of the Eurozone's economy due later in the day and data on the UK economy due on Friday.
Shares in struggling British fashion house Burberry rose around 15 percent on London's FTSE 250 as the group announced cost-cutting plans after posting a loss.
The dollar built on advances against its peers on the prospect that Trump's policies will keep the Fed from cutting interest rates as much as initially expected.
The greenback topped 155 yen for the first time since July, putting focus on Japanese authorities who have said they are prepared to support their unit if they considered moves to be one-sided or speculative.
The dollar was also at a more than one-year high against the euro.
In company news, Chinese tech giant Tencent rose more than one percent after an upbeat earnings announcement in which it saw forecast-beating profits in the third quarter.
It also said it saw signs of a recovery in the world's number two economy.
Chinese e-commerce giant JD.com also announced a pickup in third-quarter revenue, in a positive sign for the firm as it grapples with lacklustre consumer spending.
The firm's latest results -- as well as rival Alibaba's expected third-quarter filing on Friday -- are being closely scrutinised by analysts and investors for signs that recent measures taken by the Chinese government to boost activity are having an impact.
- Key figures around 1100 GMT -
London - FTSE 100: UP 0.3 percent at 8,052.13
Paris - CAC 40: UP 0.9 percent at 7,284.77
Frankfurt - DAX: UP 1.2 percent at 19,220.72
Tokyo - Nikkei 225: DOWN 0.5 percent at 38,535.70 (close)
Hong Kong - Hang Seng Index: DOWN 2.0 percent at 19,435.81 (close)
Shanghai - Composite: DOWN 1.7 percent at 3,379.84 (close)
New York - Dow: UP 0.1 percent at 43,958.19 (close)
Dollar/yen: UP at 155.71 yen from 155.51 yen on Wednesday
Euro/dollar: DOWN at $1.0508 from $1.0564
Pound/dollar: DOWN at $1.2636 from $1.2710
Euro/pound: UP at 83.19 pence from 83.11 pence
West Texas Intermediate: UP 0.4 percent at $68.70 per barrel
Brent North Sea Crude: DOWN 0.4 percent at $72.55 per barrel
(W.Uljanov--DTZ)
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