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Stock markets waver, oil prices sink

·3-min read

Stock markets wobbled on Monday as investors track a raft of corporate earnings reports while oil prices sank over concerns about Chinese demand.

London's FTSE 100, the Paris CAC 40 and Frankfurt DAX were flat in afternoon trading after drifting higher earlier in the day.

Wall Street opened lower on the first day of August following a strong month in July.

Asian stock markets finished higher despite another disappointing reading on the health of the Chinese economy.

The closely watched Purchasing Managers' Index of manufacturing activity shrank in July on the back of weak demand and the strict zero-Covid measures imposed in parts of the country.

While sweeping curbs have eased in major hubs such as Shanghai and Beijing, sporadic lockdowns in other cities and towns have kept businesses and consumers worried with few signs of the policy easing.

The China data sent oil prices sharply lower, with the international benchmark, Brent, slipping just under $100 per barrel while the main US contract, WTI, fell by five percent to around $94.

"Oil prices were under pressure after weak Chinese manufacturing figures which really show the continuing impact of lockdowns on the country's economy," said AJ Bell investment director Russ Mould.

"China remains one of the biggest consumers of oil and other commodities." Mould said.

Traders are also waiting for another output decision by the OPEC+ group of major crude-producing nations on Wednesday.

- 'Bullish' HSBC -

In corporate news, Asia-focused lender HSBC provided another boost with a "bullish" outlook, alongside its intention to revert to quarterly shareholder dividends next year.

HSBC shares jumped by seven percent percent in the British capital.

Other major corporate earnings reports this week include those from oil giant BP, US ride-hailing firm Uber, Japanese automaker Toyota and Chinese tech giant Alibaba.

Last week, strong earnings from US titans Amazon and Apple sparked healthy Wall Street gains and eased concerns about the economic impact of surging inflation and rising rates.

That came after investors took Federal Reserve chief Jerome Powell's comments Wednesday to indicate the US central bank could start slowing down its monetary tightening, providing a much-needed boost to stocks.

The Bank of England is expected to deliver a bumper 0.5-percentage-point interest rate hike this Thursday to combat rocketing inflation.

"Sharp hikes by the US Federal Reserve and European Central Bank in July make it all the more likely that it will pull the trigger on an outsize rate hike," analyst Neil Wilson told AFP.

Global central banks are ramping up borrowing costs in an attempt to get a handle on runaway consumer price inflation.

- Key figures at around 1340 GMT -

London - FTSE 100: FLAT at 7,422.33 points

Frankfurt - DAX: FLAT at 13,491.18

Paris - CAC 40: FLAT at 6,446.18

EURO STOXX 50: DOWN 0.1 percent at 3,703.75

New York - Dow: DOWN 0.4 percent at 32,723.31

Tokyo - Nikkei 225: UP 0.7 percent at 27,993.35 (close)

Hong Kong - Hang Seng Index: UP 0.1 percent at 20,165.84 (close)

Shanghai - Composite: UP 0.2 percent at 3,259.96 (close)

Euro/dollar: UP at $1.0255 from $1.0228 Friday

Pound/dollar: UP at $1.2260 from $1.2189

Euro/pound: DOWN at 83.64 pence from 83.89 pence

Dollar/yen: DOWN at 131.93 yen from 133.25 yen

Brent North Sea crude: DOWN 3.9 percent at $99.94 per barrel

West Texas Intermediate: DOWN 5.0 percent at $93.64 per barrel


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