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Stocks make modest gains after days of records

The gains in Europe have been driven by good earnings reports and 'strong' Covid vaccine programmes
Last Updated 13 August 2021, 17:18 IST

European and US stock markets made modest gains on Friday after days of records as investors weighed concerns about the pandemic and disappointing US consumer data.

European equities edged higher to cap the week, with Frankfurt's DAX 30 momentarily breaching the 16,000-point mark for the first time and Paris briefly reaching a 21-year high.

"This has been a common feature of the markets recently, small and steady gains that have seen European stocks push into record territory," said Craig Erlam, senior market analyst at OANDA.

The gains in Europe have been driven by good earnings reports and "strong" Covid vaccine programmes that have enabled countries to loosen restrictions, Erlam said.

"The outlook is very encouraging for Europe and we're seeing that reflected in the indices," he said.

The Dow and S&P 500 were slightly up during midday trading as they eyed a fourth consecutive record. The tech-heavy Nasdaq was flat.

"US stocks have trimmed early gains and are hovering around the flatline following an unexpected plunge in August consumer sentiment to the lowest since 2011," said Schwab analysts.

The index compiled by the University of Michigan fell by 11 points this month to 70.2, a 13.5 per cent drop from July and much worse than what analysts had expected.

"There is little doubt that the pandemic's resurgence due to the Delta variant has been met with a mixture of reason and emotion," said Richard Curtain, chief economist for the survey.

"Consumers have correctly reasoned that the economy's performance will be diminished over the next several months," Curtain said.

"But the extraordinary surge in negative economic assessments also reflects an emotional response, mainly from dashed hopes that the pandemic would soon end."

Investors have also reacted to conflicting inflation data this week as any steep increase could prompt the Federal Reserve to roll back its massive stimulus programme sooner than expected.

Data on Thursday showed US producer prices rose more than twice as much as forecast in July from a month earlier, while the annual rate hit a record.

The producer price report came on the heels of Wednesday's consumer price index, which showed inflation moderating in July.

The first signal of a move to taper huge US stimulus could come as soon as this month when Federal Reserve chief Jerome Powell is due to address the annual central banking conference in Jackson Hole, Wyoming.

The worry is that tapering, along with rises to interest rates to contain inflation, could hamper the recovery.

In Asia, stock markets closed lower following a broadly positive week as the Chinese government tightens its grip on the world's second-biggest economy.

"Global investors are assessing the implications of the spread of the Delta virus, the possible tapering by the Fed, and China's clampdown," said Geir Lode, of Federated Hermes.

Elsewhere, crude prices extended their recent sell-off fuelled by concerns that the Delta mutation would hurt demand, with the International Energy Agency warning as much in a report on Thursday.

New York - Dow: UP 0.1 per cent at 35,533.28 points

Frankfurt - DAX 30: UP 0.3 per cent at 15,977.44 (close)

London - FTSE 100: UP 0.4 per cent at 7,218.71 (close)

Paris - CAC 40: UP 0.2 per cent at 6,896.04 (close)

EURO STOXX 50: UP 0.1 per cent at 4,229.70 (close)

Tokyo - Nikkei 225: DOWN 0.1 per cent at 27,977.15 (close)

Hong Kong - Hang Seng Index: DOWN 0.5 per cent at 26,391.62 (close)

Shanghai - Composite: DOWN 0.2 per cent at 3,516.30 (close)

Euro/dollar: UP at $1.1797 from $1.1733 at 2100 GMT

Pound/dollar: UP at $1.3859 from $1.3809

Euro/pound: UP at 85.11 pence from 84.94 pence

Dollar/yen: DOWN at 109.77 yen from 110.43 yen

West Texas Intermediate: DOWN 0.5 per cent at $68.74 per barrel

Brent North Sea crude: DOWN 0.7 per cent at $70.85 per barrel

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(Published 13 August 2021, 17:03 IST)

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