World equities can’t shake rate rise blues

The world’s main stock markets slipped yesterday as fears of rising US interest rates undermined any attempt at recovery following heavy recent losses, analysts said. Global markets are “scrutinizing yesterday’s release of the minutes from the US Fed’s September monetary policy meeting that suggested rate hikes are likely to continue”, analysts at Charles Schwab said. What’s more, rate fears are just one item on a smorgasbord of worries, including over global trade wars, high oil price, Brexit uncertainty and Italy’s ongoing fiscal troubles, analysts said.

London, Frankfurt and Paris all closed the day lower, after “sipping on a Brexit/trade war/ Italian budget/US interest rates cocktail”, as Spreadex analyst Connor Campbell put it. Early on in the session, European markets made a modest attempt at recovery but fizzled out as soon as it became clear that US investors wouldn’t play along. Approaching midday in New York, all three main US stock market indexes were down.

Earlier, Asian markets resumed falls as investors contemplated the outlook for more interest rate hikes by the Federal Reserve, while Washington added to China-US frictions. Shanghai dived almost three percent to a four-year low as already-strained relations between China and the US took another hit after the White House said it plans to withdraw from an international treaty on postal rates, in a decision aimed at pressuring Beijing.