Equities
China’s runaway stocks rally stuttered as investors tempered their expectations for a robust economic recovery, keeping pressure on shares globally.
Benchmark indexes in China notched up their biggest daily losses since the COVID-19 pandemic began, with stocks in Shanghai and blue-chips closing down 6.6 per cent and 7.1 per cent respectively, snapping a 10-day winning streak.
Wall Street’s main indexes were little changed at the open as investors awaited the minutes of the Federal Reserve’s latest meeting for more clues on the interest-rate path.
The Dow Jones Industrial Average fell 0.02 per cent to 42,070.32, the S&P 500 slid 0.01 per cent to 5,751.8, and the Nasdaq Composite dropped 0.02 per cent to 18,179.22 at the bell.
The Toronto Stock Exchange’s S&P/TSX composite index opened 0.23 per cent lower at 24,016.51, led by losses in energy stocks.
“The investor community was expecting that the [Chinese] government would announce a fiscal package of as much as 3 trillion yuan to complement the latest monetary measures to boost growth, but the Chinese authorities unveiled a laughable amount of 200 billion yuan in spending for next year,” Ipek Ozkardeskaya, senior analyst at Swissquote Bank, wrote in a note.
“The worry is that the Chinese will throw money into the market without targeting troubled areas, and the lack of a fiscal leg to the Chinese stimulus package will hardly address the major issues and improve ... suffering fundamentals.”
Overseas, the pan-European STOXX 600 was up 0.17 per cent in morning trading. Britain’s FTSE 100 gained 0.22 per cent, Germany’s DAX rose 0.19 per cent and France’s CAC 40 advanced 0.18 per cent.
Japan’s Nikkei closed 0.87 per cent higher, buoyed by a rise in Seven & i shares on reports that Canada’s Couche-Tard had sweetened its takeover bid for the 7-Eleven parent company. Hong Kong’s Hang Seng fell 1.38 per cent.
Commodities
Oil extended losses as weak demand and rising U.S. inventories countered the risk of supply disruption from conflict in the Middle East and Hurricane Milton in the United States.
Brent crude futures fell 1.5 per cent to US$76.06 a barrel. West Texas Intermediate (WTI) futures dropped 0.9 per cent to US$72.93 a barrel.
“Despite the current heightened tensions in the Middle East, it is easy to forget that the oil market is very much vulnerable to corrections due to the ongoing bearish macro narrative centered on China,” said Harry Tchilinguirian, head of research at Onyx Capital Group.
In other commodities, spot gold was down 0.4 per cent at US$2,612.88 an ounce, while U.S. gold futures eased 0.2 per cent at US$2,630.80.
Currencies and bonds
The Canadian dollar weakened against its U.S. counterpart.
The day range on the loonie was 73.09 US cents to 73.30 US cents in early trading. The Canadian dollar was down about 0.7 per cent against the greenback over the past month.
The U.S. dollar index, which weighs the greenback against a group of currencies, gained 0.16 per cent to 102.72.
The euro slid 0.21 per cent to US$1.0959. The British pound declined 0.13 per cent to US$1.3087.
In bonds, the yield on the U.S. 10-year note was last up at 4.039 per cent.
Economic news
Japan machine tool orders
Germany trade surplus
(10 a.m. ET) U.S. wholesale inventories for August, which rose less than initially thought amid a sharp moderation in the pace of increase in motor vehicle stocks, a trend that if sustained could temper expectations for robust economic growth in the third quarter.
(2 p.m. ET) U.S. Fed minutes from Sept. 17-18 meeting are released.
With Reuters and The Canadian Press