Yahoo Finance LIVE: Europe mixed and Wall Street falls as WTO cuts estimate for exports growth
How major markets are performing on Thursday
European stock markets were mixed on Thursday while Wall Street fell, as the World Trade Organisation (WTO) cut its estimate for exports growth around the world this year amid a slowdown in global manufacturing.
In London, the FTSE 100 (^FTSE) was outperforming, trading 0.5% higher by the end of the day, after a three-day losing streak due to a sell-off in the bond market this week.
Meanwhile the CAC (^FCHI) ended flat in Paris, and the Frankfurt DAX (^GDAXI) was 0.2% lower.
Across the pond, the S&P 500 (^GSPC) fell 0.7% by the time of the European close, and the tech-heavy Nasdaq (^IXIC) was almost 0.9% lower. The Dow Jones (^DJI) was 0.5% down in New York.
The WTO said on Thursday that it now expects world trade volumes to grow by just 0.8% in 2023, down from a forecast of 1.7% in April. Growth is expected to pick up to 3.3% next year.
It said: "World trade and output slowed abruptly in the fourth quarter of 2022 as the effects of tighter monetary policy were felt in the United States, the European Union and elsewhere, but falling energy prices and the end of Chinese pandemic restrictions raised hopes of a quick rebound.
"So far, these hopes have not materialized, as strained property markets have prevented a stronger recovery from taking root in China, and as inflation has remained sticky in the United States and the EU.
"Together with the after-effects of the war in Ukraine and the COVID-19 pandemic, these developments have cast a shadow over the outlook for trade in 2023 and 2024."
Read more: UK falling behind EU on green growth, says think tank
The strength of the FTSE was also boosted by a weaker pound which dropped slightly on the day amid news that the UK construction sector contracted in September for the first time in three months.
According to the latest S&P Global/CIPS construction purchasing managers’ index, the reading came in at 45.0 for the month, a steep drop from 50.8 in August. House building in the UK suffered its worst decline in activity last month.
Elsewhere, the US 10-year currently sits at 4.75% from a 16-year high at 4.887%, while the US dollar has softened.
"Treasury yields gave back some ground and the dollar pulled back from an 11-month high, enabling equity markets to put on a bit of a show yesterday, though the FTSE 100 lagged significantly due to the drop in crude prices which has underpinned its outperformance of late," Neil Wilson, chief market analyst at Markets.com said.
"Higher oil prices had been on the factors behind renewed angst over inflation, whilst Tuesday’s Jolts job openings data catalysed the brewing surge in yields."
Ajay Rajadhyaksha, analysts at Barclays (BARC.L) said on Thursday that the surge in yields which is forcing government and corporate borrowing costs higher may not end until a repricing of stocks.
He said: “We believe that the eventual path to bonds’ stabilising lies through a further re-pricing lower of risk assets.”
Watch: How does inflation affect interest rates?
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