London (AFP) – European and US stocks were mostly flat Monday at the start of a week packed with major earnings and data in addition to central bank decisions on interest rates.
Oil prices, meanwhile, fell after reaching three-month highs on concerns over a possible wider conflict in the Middle East after a drone attack on a base in Jordan killed three American soldiers.
“Strikingly, oil prices, which shot up initially on the report, have rolled over,” said market analyst Patrick O’Hare at Briefing.com.
“The price action there — and in the equity futures market in general — suggests traders aren’t convinced the drone strike, and impending response, will lead to a more involved military action and major disruption of oil supplies out of the Middle East,” he added.
President Joe Biden blamed Iran-backed militants for the first US military deaths in the region since the Israel-Hamas war began.
Iran said it had nothing to do with the attack and denied US and British accusations that it supported militant groups responsible for the strike on the remote frontier base in Jordan’s northeast, near the borders with Iraq and Syria.
AJ Bell investment director Russ Mould said crude prices having hit their highest level since November felt “ominous given it adds inflationary pressure at a time when borrowers and the markets are hoping to see interest rates cut.”
The week’s key market event is expected to be Wednesday’s interest rate policy decision by the Federal Reserve.
While the Fed is expected to keep rates unchanged, traders hope to hear some guidance from officials on their plans, with a cut in March seen as a toss-up.
David Morrison, senior market analystat Trade Nation, said there were hopes the Fed statement and chairman Jerome Powell’s subsequent press conference “may contain clues to the timing of the first rate cut for nearly four years”.
The Bank of England will announce its latest interest rate call on Thursday.
Other notable events this week include earnings from tech and energy giants, including Apple and Shell, in addition to US jobs data.
“Today marks a lull before the calendar heats up with earnings and central bank decisions,” said Chris Beauchamp, chief market analyst at online trading platform IG.
“As a result, we have seen quiet trading on both sides of the Atlantic,” he added.
Elsewhere, the Shanghai stock market closed lower following news that a Hong Kong court had issued a winding-up order against Chinese developer Evergrande, stoking fresh worries about the property sector and economy.
Evergrande’s Hong Kong-listed shares collapsed more than 20 percent on the news before they were suspended.
Still, Redmond Wong, chief China strategist at Saxo Markets, said “the winding-up of Evergrande’s Hong Kong listing entity has been widely anticipated and should not impact the general market much”.
Monday’s decision came amid worries that a huge debt crisis in China’s property sector could spill over into the wider economy.
The order kickstarts a long process that should see Evergrande’s offshore assets liquidated and its management replaced, after the company failed to develop a working restructuring plan.
– Key figures around 1630 GMT -Brent North Sea Crude: DOWN 1.2 percent at $82.57per barrelWest Texas Intermediate: DOWN 1.3 percent at $77.00New York – Dow: FLAT at 38,104.22 pointsNew York – S&P 500: DOWN less than 0.1 percent at 4,893.83New York – Nasdaq Composite: UP 0.2 percent at 15,490.36London – FTSE 100: FLAT at 7,632.74 (close)Paris – CAC 40: UP less than 0.1 percent at 7,640.81 (close)Frankfurt – DAX: DOWN 0.1 percent at 16,941.71 (close)EURO STOXX 50: UP less than 0.1 percent at 4,639.36 (close)Tokyo – Nikkei 225: UP 0.8 percent at 36,026.94 (close)Hong Kong – Hang Seng Index: UP 0.8 percent at 16,077.24 (close)Shanghai – Composite: DOWN 0.9 percent at 2,883.36 (close)Euro/dollar: DOWN at $1.0809 from $1.0858on FridayPound/dollar: DOWN at $1.2680 from $1.2703Dollar/yen: DOWN at 147.67 yen from 148.13 yenEuro/pound: DOWN at 85.23 pence from 85.44 penceburs-rl/js
