Disappointing US Corporate Earnings Keep Markets Subdued
Financial markets were seen starting off on a flat note after yet another series of pretty disappointing corporate earnings in US and before the final presidential debate for an election, which is expected to be a tight one. With lack of data related to economy in the week and without any sign of any major event related to debt crisis in Europe, investors are likely to pay more attention to developments in US.
A poor forecast of earnings from major equipment manufacturer, Caterpillar and few other discouraging corporate results once again disappointed the investors this Monday. While Wall Street was seen opening flat, markets in Europe lost majority of the gains. Towards the later half of the day, the focus is likely to shift to the technology sector, with Yahoo scheduled to announce trading update. Last week, broad retreat was witnessed due to poor results from tech giants like Microsoft and Google.
In Europe, DAX of Germany plunged 0.5% reaching 7,340 and the French CAC-40 fell 0.3% to 3,493. The FTSE 100 index was recorded 0.1% lower at 5,889. BP of Britain was in spotlight after confirming that it had decided to sell 50% of its TNK-BP’ stake to Rosneft for $17.1 billion and 12.84% of its stake in Russian oil group. The company plans to increase its Rosneft’s stake to 19.75% with the money it acquired. BP shares contracted 1.8%.
The Dow Jones industrial average in US was flat and was recorded at 13,338 and the wider S&P 500 index was also seen sailing steadily at 1,433. The financial markets are also getting affected by the ongoing presidential election fight, not least as the fight between Mitt Romney and Obama continue to appear to be a very close one. Coming Monday, they will take part in their last debate, which will mostly be about foreign affairs.
One of the analysts at BMO Capital Markets, Benjamin Reitzes said that one of the interesting points to look forward to this debate would be Romney’s take on the pledge to consider China as currency manipulator and this could in turn result in increasing protectionism in between the two nations.
Trading in Asia was seen subdued. Nikkei 225 in Japan increased just 0.1% to reach at 9,010.71, mainly weighed down due to trade deficit widening in the month of September. Kospi in South Korea plunged 0.1% to arrive 1,941.59 and Hang Seng of Hong Kong increased 0.7% to 21,697.55.