European stocks slip

Europe’s main stock markets slid Monday as investors still rattled by last week’s turmoil pondered China’s slowing economy and potential US interest rate moves, the AFP reported.

The CAC 40 in Paris shed 0.47 per cent to 4,652.95 points in mid-afternoon trading, and Frankfurt’s DAX 30 gave up 0.38 per cent to 10,259.46 points compared with Friday’s close.

London’s stock exchange was closed for a national holiday.

Global equities were hammered last week as risk-averse investors dumped shares amid panic that the flagging Chinese economy – the world’s second largest – could spark a new worldwide recession.

Markets took much of that back in late-week gains on encouraging US economic news.

But European stocks ended August with their worst month in four years. The DAX fell by 9.3 per cent over the month, the CAC dropped by 8.5 per cent and the FTSE 100 in London shed 6.7 per cent.

Lingering concerns about China and comments over the weekend by the US Federal Reserve officials left analysts Monday split over whether the US Federal Reserve would raise interest rates for the first time since 2006 next month.

In a speech at a conference on monetary policy in Jackson Hole, Wyoming, the Fed’s number two Stanley Fischer said: “We should not wait until inflation is back to two per cent to begin tightening.”

He added, however, that the Fed needed to “consider the overall state of the US economy as well as the influence of foreign economies on the US economy as we reach our judgement on whether and how to change monetary policy.”

Interpretation of Fischer’s comments varied greatly.

“Despite the recent market turbulence, it would appear that an interest rate increase in September still remains on the cards. It continues to depend on the strength of incoming economic data, of which the (US) employment report at the end of this week is the most important,” said Juliet Tennent, an economist with brokerage Goodbody of an official jobs report due on Friday.

Source : Punch

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