Global Equities Markets Retreat Amid Inflation Fears; Oil Slip

19/02/2021 Stocks in Asia pulled back on Friday in the wake of a decline on Wall Street as investors mulled the impact of the recent climb in Treasury yields on the outlook for equities. Crude oil added to recent losses.
Japan and Hong Kong among Asian underperformers. U.S futures dipped after the benchmarks declined Thursday. U.S. initial jobless claims rose more than expected, highlighting the challenges for the recovery from the pandemic. Ten-year Treasury yields advanced above 1.31%, raising speculation that rising borrowing costs could stifle economic recovery. The dollar edged up.

The JSE fell 0.8% to 66,575 and the Top-40 0.9%. Naspers fell 0.8% to R3,780.75, while Prosus dropped 0.7% to R1,918.09. Anglo American fell 1.1%, while AngloGold Ashanti slumped 4.2% and Harmony Gold slid 1.7%.

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European stocks performed poorly on Thursday as earning results from Airbus, aviation heavyweight, dampened investor sentiment. The pan-European Stoxx 600 fell 0.82%, alongside a 0.16% dip for Germany’s DAX to, while the CAC-40 was 0.65 weaker. The FTSE 100 ended the session down 1.4%, with Barclays helping the banking sector remain below the waterline after the release of its full-year results. Barclays was in the red by 4.44% even after it reinstated its dividend and said it would buy back up to £700m of shares.

Wall Street closed in negative territory on Thursday, as weekly jobless claims report fell short of estimates. The Dow was down 0.38% at the close of trading, the S&P 500 lost 0.44%, alongside the Nasdaq falling 0.72%. Americans filing for unemployment claims rose by 13,000 to 861,000 over the week finishing on 13 February. Economists were expecting to see 773,000 new claims. U.S futures in the doldrums on Friday: Dow futures on the backfoot 0.25%, with the S&P500 retreating 0.29%, while the Nasdaq is trailing behind 0.36%.

Asian stocks declined for a second day, led by energy names as oil prices slid on the restart of production in Texas. Australia’s ASX 200 led declines among Benchmarks, pulled lower by commodities-related shares including BHP and Rio Tinto. MSCI’s broadest index of Asia Pacific shares, ex-Japan, was last down 0.1% at 733.67 from a record high of 745.89 touched on Thursday. S&P/ASX200 last down 1.21% in Sydney, Nikkei off 0.81% in Japan, while both Shanghai and Hong Kong are down 0.32% and 0.85 respectively.

Oil was down Friday morning, continuing Thursday’s losses over growing worries that refineries shut by the cold snap in Texas and surrounding areas will take time to reopen, in turn denting crude oil demand.
Brent oil futures slid 1.64% to $62.88 and WTI futures slid 1.90% to $59.37, falling just below the $60 mark.