Global stock markets wavered on Monday even as Tokyo closed at an all-time high, while oil prices rose slightly before retreating after a decision by major crude producers to extend output cuts.
Wall Street indexes were slightly lower after the Nasdaq and S&P 500 closed at all-time highs last week.
Tech behemoth Apple was notably off almost three percent after being hit with an EU fine of more than 1.8 billion euros ($1.9 billion) for violating the bloc’s laws by preventing European users from accessing information on alternative, less expensive music streaming services.
In Europe, London shed 0.6 percent at the close ahead of Wednesday’s unveiling of the government’s pre-election budget, and Frankfurt was just a percentage point off while Paris bucked the trend with a 0.3 percent gain.
Japan’s benchmark Nikkei 225 index proved the star of the show as it closed above 40,000 points for the first time.
Tokyo is enjoying a record-run higher thanks to Wall Street rallies, robust corporate earnings and optimism over artificial intelligence, analysts said.
“Japan’s stock market is also being boosted by the weak yen which is making exports cheaper and more attractive to overseas buyers,” said David Morrison, senior market analyst at the investment platform Trade Nation.
In New York and in Europe, investors waited for fresh signals on interest rates from the US and eurozone central banks later this week as well as a pre-election UK budget.
The European Central Bank is expected to keep interest rates unchanged again at a regular meeting on Thursday, analysts said, as official wants to ensure inflation is on a clear downward path before they cut borrowing costs.
Investors will be also looking to Fed chairman Jerome Powell’s testimony to Congress and US job figures later this week for indications on when the US central bank might cut rates.
“We don’t expect the chair to stray very far from the Fed’s recent messaging — officials are in a ‘wait-and-see’ mode as there’s still a lot of ambiguity in the data,” said John Briggs, global head of desk strategy at NatWest Markets.
Elsewhere in Asia, Hong Kong’s stock market finished flat Monday and Shanghai closed higher ahead of the start of China’s annual legislative conclave, with officials expressing concern over the nation’s struggling economy and youth unemployment.
– Oil cuts –
On the commodities side, the international oil benchmark, Brent crude, rose to $83.79 before edging down a day after Saudi Arabia, Russia and several other OPEC+ members announced extensions to production cuts first announced in 2023.
The extension to mid-2024 is part of an agreement among oil producers to increase prices following economic uncertainty.
Monday’s weak price movement followed rises last week on expectations of the extension of the cuts, said Briefing.com analyst Patrick O’Hare.
“There is also some conjecture that the decision to extend those cuts could be a tacit indication that demand is relatively weak,” O’Hare said.
Kathleen Brooks, research director at the trading platform XTB, saw the price of oil “anchored around $80 per barrel because there is ample oil supply, even with OPEC cuts, and demand growth is set to slow, which are factors that OPEC can’t control”.
– Key figures around 1700 GMT –
New York – Dow: DOWN 0.2 percent at 39,021.50 points
New York – S&P 500: FLAT at 5,135.98
New York – Nasdaq Composite: DOWN 0.2 percent at 16,239.25
London – FTSE 100: DOWN 0.6 percent at 7,640.33 (close)
Paris – CAC 40: UP 0.3 percent at 7,956.41 (close)
Frankfurt – DAX: DOWN 0.1 percent at 17,716.17 (close)
EURO STOXX 50: UP 0.3 percent at 4,911.47 (close)
Tokyo – Nikkei 225: UP 0.5 percent at 40,109.23 (close)
Hong Kong – Hang Seng Index: FLAT at 16,595.97 (close)
Shanghai – Composite: UP 0.4 percent at 3,039.31 (close)
Euro/dollar: UP at $1.0857 from $1.0841 on Friday
Dollar/yen: UP at 150.50 yen from 150.11 yen
Pound/dollar: UP at $1.2693 from $1.2656
Euro/pound: DOWN at 85.54 pence from 85.65 pence
Brent North Sea Crude: DOWN 0.6 percent at $83.03 per barrel
West Texas Intermediate: DOWN 1.0 percent at $79.09 per barrel
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