LONDON: Stock markets diverged Monday, the start of a week packed with major earnings and data in addition to central bank decisions on interest rates.
Oil prices reached three-month highs on concerns over a possible wider conflict in the Middle East.
“Crude hitting its highest level since November feels ominous given it adds inflationary pressure at a time when borrowers and the markets are hoping to see interest rates cut,” noted AJ Bell investment director Russ Mould.
“Investors may keep their powder dry as they await crunch central bank meetings in the US and UK.”
Other notable events this week include earnings from tech and energy giants, including Apple and Shell, in addition to US jobs data.
FTSE 100 near two-week high on oil boost; Ryanair slides
Oil prices rose after a drone attack on a base in Jordan killed three American troops, with President Joe Biden blaming Iran-backed fighters 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 groups responsible for the strike on the remote frontier base in Jordan’s northeast, near the borders with Iraq and Syria.
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.
The week’s key market event was expected to be Wednesday’s crucial policy decision by the Federal Reserve.
While the Fed meeting is not expected to see any move on interest rates, traders hope to hear some guidance from officials on their plans, with a cut in March seen as a toss-up.
The Bank of England will announce its latest interest rate call on Thursday.
Key figures around 1100 GMT
Brent North Sea Crude: UP 0.1 percent at $83.66 per barrel
West Texas Intermediate: UP 0.1 percent at $78.08
London - FTSE 100: UP 0.1 percent at 7,645.63 points
Paris - CAC 40: FLAT at 7,634.86
Frankfurt - DAX: DOWN 0.5 percent at 16,883.56
EURO STOXX 50: DOWN 0.1 percent at 4,629.38
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)
New York - Dow: UP 0.2 percent at 38,109.43 (close)
Euro/dollar: DOWN at $1.0822 from $1.0858 on Friday
Pound/dollar: UP at $1.2711 from $1.2703
Dollar/yen: DOWN at 147.79 yen from 148.13 yen
Euro/pound: DOWN at 85.13 pence from 85.44 pence
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