World stocks drift ahead of Fed speeches as oil slump, mixed China data dampen sentiment

HONG KONG – World stock markets struggled for direction on Thursday as weak oil prices, mixed Chinese economic data and the rising prospect of a Fed rate hike dulled investor interest.

KEEPING SCORE: European stocks opened lower, with Britain’s FTSE 100 losing 0.6 per cent to 6,258.71, while France’s CAC 40 fell 0.8 per cent to 4,914.64. Germany’s DAX shed 0.5 per cent to 10,848.06. U.S. stocks were poised to open higher, with Dow futures up 0.1 per cent to 17,666.00 while broader S&P 500 futures gained climbed 0.1 per cent to 2,071.40.

CENTRAL BANKERS: Trading was subdued ahead of remarks later Thursday from top officials at the Fed, as expectations grow that the U.S. central bank will raise interest rates from their ultra-low levels at its December meeting. Federal Reserve Chair Janet Yellen is scheduled to deliver opening remarks at a conference on monetary policy implementation. Vice Chair Stanley Fischer is to speak at the same conference.

DATA DUMP: Investors were digesting the latest round of economic data from across Asia. In Australia the jobless rate fell to 5.9 per cent in October, a bigger than expected decline and the lowest level since May. In Japan machinery orders, which are seen as a measure of business investment, recorded their first gain in four months, according to Kyodo News. That follows a mixed batch of Chinese data released the day before that showed retail sales growth edged up in October while factory output and investment weakened, which may reduce the pressure on Beijing to take further action to stimulate the world’s No. 2 economy.

QUOTEWORTHY: “The recent macroeconomic data were mixed, with retail sales slightly above the consensus view while the industrial production was slightly disappointing. Those data, while not great, arguably do not justify further stimulus and the market is starting to price that in,” said Gerry Alfonso, director of trading at Shenwan Hongyuan Securities in Beijing. He added that while Chinese stocks are showing signs of short term weakness, “there remains confidence in the long term prospects so the corrections are not too big.”

ASIAN SCORECARD: Japan’s benchmark Nikkei 225 index edged up less than 0.1 per cent to close at 19,697.7 while South Korea’s Kospi lost 0.2 per cent to end at 1,993.36. Hong Kong’s Hang Seng jumped 2.4 per cent to 22,888.92 while the Shanghai Composite Index in mainland China sank 0.5 per cent to 3,632.90. Australia’s S&P/ASX 200 rose less than 0.1 per cent to 5,125.70. Benchmarks in southeast Asia fell.

ENERGY: U.S. benchmark crude futures recovered from a big drop, rising 10 cents to $43.13 in electronic trading on the New York Mercantile Exchange. The contract slid $1.28, or 3 per cent, to settle at $42.93 a barrel on Wednesday after the American Petroleum Institute reported a big supply buildup, with supplies growing by 6.3 million barrels, far more than analysts expected. Brent crude, which is used to price international oils, rose 13 cents to $46.74 a barrel in London.

CURRENCIES: The dollar rose to 122.96 yen from 122.84 yen in the previous day’s trading. The euro slipped to $1.0723 from $1.0764.