No more stimulus from the Bank of Japan
• Shanghai down 6% this week
• Kingfisher bottom of the FTSE 100
• US stocks to open lower
There was no additional stimulus announced from the Bank of Japan
to encourage any return to risk taking so markets have been left eyeing weakness in China and the upcoming Federal Reserve rate decision. Japan’s Nikkei eked out small gains after nothing unexpected was announced from the BOJ in its monetary policy meeting. Volatility appears to be picking up again China’s Shanghai Composite, which is now down as much as 6% so far this week.
Weakness in China is adding to Fed rate hike concerns and causing weakness in European stocks. Germany’s DAX and France’s CAC index both slipped from early gains to losses.
German investor confidence saw a surprise rise in August but expectations for the future dropped more than expected in a sign the stock market rout has taken its toll on German investor’s belief in future returns.
Inflation in the UK slipped back to zero in August as expected, driven down by the fall in the price of crude oil. Core price which exclude food and energy also fell to 1.0% year-over year. Retail prices rose slightly in part because retailers discounted less than last summer.
The UK’s FTSE 100 dropped as much as 1% in morning trade. The main benchmark index is now holding just above 6,000 and two-week lows.
B&Q-owner Kingfisher fell to the bottom of the FTSE
after poorly-received first half results. Adjusted sales, which excludes the sale of B&Q’s business in China were lower, hurt by a poor performance in France and a strong pound. There appears to be a consumer shift from DIY to hiring tradesmen and new CEO Veronique Laury is changing the company’s emphasis accordingly by closing B&Q stores and investing in ‘Screwfix’ which sells to building professionals.
Weakness in Chinese markets fed through to another difficult day for mining companies
with Glencore again down as much as 6%, undoing all of its debt-restructuring bounce to reach no record lows. The completion of its purchase of assets from rivals Holcim and Lafarge helped CRH be one of a handful of shares seeing gains.
US markets look set for a lower open on Tuesday
. The Dow Jones is now sitting in the middle of its 16,000 – 16,700 range as sideways markets look set to dominate before Thursday’s Fed meeting.
USA pre-opening levels
S&P 500: 7 points lower at 1,946
Dow Jones: 55 points lower at 16,315
Nasdaq 100: 15 points lower at 4,293
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