LONDON, Sept 8 — Stock markets slid today as traders increasingly bet on the Federal Reserve sticking to its policy of raising US interest rates as the world’s biggest economy shows resilience despite inflation staying high.
The losses extended a sell-off endured for most of the week as various indicators suggested the US economy was in good health and the battle against inflation was still far from won, while Chinese data showed continued weakness.
The United States is “carefully” monitoring China’s challenges, US Treasury Secretary Janet Yellen said today, as the slowdown in the world’s second largest economy raises concerns for global growth.
“China faces a variety of both short and longer term global challenges, economic challenges that we’ve been monitoring carefully,” Yellen told reporters in New Delhi, ahead of a two-day G20 summit.
Asian and European stock markets slid today, one data after Wall Street was hit by a sharp drop in Apple’s share price following a report that China was banning government departments from using iPhones.
“With the economic picture appearing to sour in Europe, and the critical tech sector under pressure in the US, European stocks are heading for their eighth consecutive day of losses,” noted Joshua Mahony, chief market analyst at Scope Markets.
Elsewhere today, European natural gas prices rallied nine per cent as workers launched rolling strikes at Chevron’s gas plants in Western Australia, threatening a major production pipeline that pumps out five per cent of global LNG stocks.
Oil futures also climbed, continuing to win support from a decision by key producers Saudi Arabia and Russia to extend output cuts until the end of 2023.
Traders were meanwhile gearing up for policy decisions from major central banks this month, notably the Federal Reserve.
Strong US readings — including on the services sector and jobs — and a surge in oil prices have sparked fears the Fed will announce one more hike before the end of the year or keep borrowing costs elevated for an extended period, risking a recession.
Those worries were compounded yesterday by news that US jobs claims last week came in below forecasts. — AFP
