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Market Reports

 

Tuesday 18 December 2018 12.30

World markets down ahead of Fed Meeting

World stock markets tumbled on Tuesday as fears about a slowing global economy gripped investors, just as the U.S. Federal Reserve looks set this week to deliver its fourth interest-rate hike of the year.

Germany’s Ifo economic institute said its business climate index fell for the fourth month in a row to its lowest level in more than two years, adding to the global growth worries.  Blue-chip bourses in London, Paris and Frankfurt fell as much as 0.8 percent in early trade with oil stocks leading the decline as crude prices slid more than three percent.

A speech by Chinese President Xi Jinping which investors had hoped could lift morale had little impact, with Chinese shares falling over 1 percent.  Japan’s Nikkei lost 1.8 percent, with Monday’s fall in U.S. stocks to their lowest levels in more than a year hurting sentiment broadly. []

Turbulent stock markets and slowing international growth have fueled speculation that the Federal Reserve, which opens a two-day meeting on Tuesday, could now pause its tightening cycle or risk harming the U.S. economy.

MSCI’s world stock index, down a quarter of a percent on Tuesday, has slid 9 percent this year and is set for its worst year in a decade.  While the Fed is expected to lift rates this week, many investors expect signs of economic turbulence to prompt the Fed to signal a slowdown in the pace of tightening next year.

Oil prices meanwhile extended losses on signs of oversupply in the United States and as investor sentiment remained under pressure from concern over global economic growth and fuel demand.  U.S. crude fell as low as $47.84 per barrel, its lowest since September last year. Brent crude oil futures fell 3 percent to $57.79 per barrel.

This article was compiled by BOV Asset Management Limited, a member of the BOV Group. BOV Asset Management, TG Complex, Suite 2, Level 3, Brewery Str., Mriehel BKR 3000. Email: infoassetmanagement@bov.com Internet address: www.bovassetmanagement.com. BOV Asset Management is licensed by the MFSA.

 

 

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