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Global markets limp to finish line after volatile week

Global investors gravitated toward safe-haven assets on Friday as worries about the world economy persisted, cutting short a two-day rebound in Wall Street stocks.

US stock indexes seesawed, making it difficult to end one of the most brutal December selloffs in memory on a high note.

After flirting with strong gains in the afternoon, the Dow Jones Industrial Average ended down 76.42 points, or 0.33 percent, to 23,062.4, the S&P 500 lost 3.09 points, or 0.12 percent, to 2,485.74 and the Nasdaq Composite added 5.03 points, or 0.08 percent, to end at 6,584.52.

MSCI’s index of global equities gained 0.57 percent to bring the global benchmark to a weekly advance near 2 percent.

Markets swung wildly in a week shortened by the Christmas holiday, starting with Wall Street’s worst-ever Christmas Eve drop, pushing the S&P 500 to within a whisker of bear market territory.

Global markets have been dogged by fears of a slowdown in economic growth, political uncertainties stemming from a government shutdown in the United States and the Fed’s retained plans for more rate hikes in 2019.

Uncertainty over the terms of the UK’s exit from the European Union and Prime Minister Theresa May’s much-contested divorce deal has also weighed on investors, putting the indexes on track for their worst yearly losses since the financial crisis in 2008.

But efforts at a late Santa Claus rally failed to salve investors after a year that brought gains for very few categories of financial assets, from stocks to bonds and commodities. The global MSCI index, the S&P 500, the Dow and the Nasdaq are each headed for their worst years since the 2008 financial crisis.

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UK stock index recovers

UK shares fell on Thursday to their lowest in over two years, with the mid-cap index closing just shy of confirming a bear market, as global economy fears snuffed out cheer from Wall Street, where strong US data had driven a dramatic rebound.

The FTSE 100 ended the day 1.5 percent lower with the FTSE 250 mid-cap index giving up 1.3 percent. The former hit its lowest since July 2016 while the latter closed a mere 0.15 percent away from a level that would confirm a bear market, as calculated from a peak close in June.

London’s main bourse also recorded its steepest one-day drop since December 6, when the arrest of a top Huawei executive had renewed worries about US-China trade tensions.

Shares in multinational exporters were the biggest drags on the UK’s main bourse, which makes around 70 percent of its income abroad, over fears that a weaker dollar would dent the value of their US revenues.

 

AstraZeneca tumbled 4 percent, while HSBC, Unilever, Reckitt Benckiser, GlaxoSmithKline and British American Tobacco all fell 1.4-3.7 percent.

Retailers were back under the spotlight, with more bad news pulling down household names such as Marks & Spencer, JD Sports, Dixons Carphone, Boohoo, Primark-owner Associated British Foods by 1.6-5.2 percent.

The positivity in European stocks came after US markets sprang back to life on Thursday after heavy losses for most of the day.. The FTSE 100 was on track for its worst quarterly fall since 2011, when Europe was battling a sovereign debt crisis. It was down 10.9 percent this quarter.

China stocks extend gains; hang seng down

China shares rose on Thursday morning on hopes for policy support and as U.S. Federal Reserve Chairman Jerome Powell made comments interpreted as a dovish shift, but investors remain wary ahead of the upcoming G20 meeting in Argentina. At the midday break, the Shanghai Composite index was up 7.26 points, or 0.28 percent, at 2,608.99. China

’s blue-chip CSI300 index was up 0.31 percent, with its financial sector sub-index higher by 0.02 percent, the consumer staples sector up 0.7 percent, the real estate index down 0.77 percent and the healthcare sub-index up 0.99 percent. Chinese H-shares listed in Hong Kong rose 0.18 percent at 10,653.47, but the Hang Seng Index edged down 0.13 percent at 26,646.76 after gaining 1.3 percent a day earlier.

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India’s Sensex, nifty log gains

It was the third straight day of gains for the domestic equity market, thanks to a bounce in Wall Street in overnight trade and a rise in bank and financial stocks. A strong rupee further strengthened investor sentiment on Dalal Street. The domestic currency gained 46 paise in intraday trade to hit a high of 69.90 against the US dollar. The BSE benchmark Sensex hit an intraday high of 36,195, up 388 points only to settle at 36,077, 269 points or 0.75 per cent higher. Only six stocks ended with losses on the BSE, while the remaining edged higher with Sun Pharma 3.42 percent leading the pack. The pharma major edged 2.97 per cent higher and was trailed by Bajaj Finance NSE 1.84 percent, Vedanta, YES Bank 1.88 percent, ICICI Bank 1.43 percent and HDFC. The 50-share pack, Nifty ended the day 80 points or 0.74 per cent higher at 10,860 on first day on January F&O series. As many as 38 constituents in the index settled higher while 12 shut shop lower.

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