World stock prices slipped modestly yesterday, while sterling dropped on bleak data that raised fears about a possible British recession following the country’s June 23 vote to leave the European Union.
The key US S&P and Dow equity indexes were little changed near record peaks amid a raft of weak US corporate results.
Concerns about global oversupply hurt oil prices, putting them on track for weekly losses.
Bond and global prices fell on expectations the Federal Reserve may raise interest rates by year-end following the recent batch of encouraging US economic data.
While analysts now expect smaller US profit declines and more companies beating those estimates, disappointing results from companies like General Electric and Honeywell undermined that outlook.
GE, a bellwether for the US economy, dropped 2.2 per cent after reporting disappointing results, and weighed both key indexes down.
In early US trading, the Dow Jones industrial average was up 3.56 points, or 0.02 per cent, at 18,520.79, the S&P 500 was 2.63 points, or 0.12 per cent, higher at 2,167.8 and the Nasdaq Composite was up 9.89 points, or 0.19 per cent, to 5,083.79.
Europe’s broad FTSEurofirst 300 index dipped 0.15 per cent to 1,342.13, bogged down by lower mining shares and Swedish construction from Skanska.
The MSCI world equity index, which tracks shares in 45 nations, fell 0.39 points or 0.09 per cent, to 412.04.
Japan’s Nikkei closed down 1.1 per cent, dragged downby the yen’s one per cent rally on Thursday.
The yen was little changed at 105.82 yen per dollar and 116.61 yen per euro.
The dollar index edged up 0.2 per cent at 97.155.
Among major currencies, sterling booked the biggest daily move, losing nearly one per cent to $1.3109 on a dramatic deterioration in British data on manufacturing and services activity in July.
These purchasing managers’ figures were consistent with a broader 0.4 per cent British economic contraction in the third quarter, pushing up the probability of a recession.
Benchmark 10-year US Treasury yields rose over a basis point at 1.577 per cent, while 10-year German bond yields were flat at -0.1 per cent.
Spot gold prices fell $8.66 or 0.65 per cent, to $1,322.04 an ounce.
In the oil market, Brent crude was last down $0.68, or down 1.47 per cent, at $45.52 a barrel. US crude was last down $0.67, or down 1.5 per cent, at $44.08 per barrel. (Reuters)