Fragile sentiment as global market sell-off eases

New York’s Dow Jones Industrial Average had closed more than 500 points, or 2%, down during Thursday’s session following a 3% fall the previous day.

There had earlier been a further dip for the FTSE 100 in Britain, which saw £36bn wiped off the value of its constituent companies – taking the total loss over two days to £60bn.

But Asia started Friday on a largely positive footing. The Nikkei in Japan was almost 0.5% higher by the close while the Hang Seng in Hong Kong was 1.7% up.

The main markets in Europe were up too but also with subdued sentiment, with the FTSE 0.7% higher by lunchtime while the Dow rose 1.5% at the open.

Analysts pointed to some cautious buying opportunities being taken, better than expected financial results for US banks and hopes of an easing of trade tensions between US president Donald Trump and his Chinese counterpart.

It emerged on Friday the pair were hoping to stage trade war peace talks later this month.

Market experts have pointed to a cocktail of worries for stock market investors that have been building in recent weeks.

:: The global stock market sell-off explained

Chief among them is the rising path of US interest rates, which it is feared could put the brakes on the world’s biggest economy by adding to borrowing costs for consumers and businesses.

Adding to the anxiety is the uncertainty caused by Mr Trump’s trade war with China as well as the sharp upturn in yields on bonds – parcels of US government debt – which is diverting some investor attention from stocks.

The ongoing market turmoil prompted Mr Trump to lash out at the US Federal Reserve – accusing the central bank of being “out of control” after a series of interest rate hikes.

But the Fed – led by Mr Trump’s hand-picked chairman Jerome Powell – won backing from International Monetary Fund chief Christine Lagarde, who said that raising rates in economies like America’s was “clearly a necessary development”.

Mr Trump conceded to White House reporters that he was “not going to fire” Mr Powell.

Commenting on the market mood on Friday, Scott Brown of Raymond James said: “The focus has now shifted to earnings, which are expected to be strong for this quarter and will offer markets some support.”