Stocks recover in European trading; Wall Street seen rising

Japan’s Nikkei 225 index swooned 3.7 per cent to 21,268.73. Hong Kong’s Hang Seng index ended 1 per cent lower at 24,994.46 and Australia’s S&P ASX 200 sank 2.8 per cent to 5,664.10.

But late in the day, the Shanghai Composite index erased its early losses to end up only 0.5 points at 2,603.80. Benchmarks in Thailand and Indonesia also logged gains.

As in New York, Asia’s losses were heaviest for technology companies. Semiconductor maker Tokyo Electron lost 4.3 per cent and Taiwan Semiconductor Manufacturing Co. dropped 4.4 per cent. South Korea’s Samsung Electronics sank 3.6 per cent and Japanese telecoms and energy giant Softbank lost 4.4 per cent.

Other sectors also felt the pain.

Toyota Motor Corp. gave up 2.7 per cent while Hong Kong-based retail supply chain giant Li & Fung Ltd. lost 1.3 per cent. Also in Hong Kong, airline Cathay Pacific’s shares dropped as much as 6.5 per cent but ended 3.8 per cent lower after it said it had discovered a data breach affecting 9.4 million passengers.

Still, some market observers were taking the latest bout of volatility in stride.

“I think the Hong Kong market is really very close to bottom, because when you look at the value, it’s very extremely cheap. So how low can it get? Maybe it will reach 24,000 before we find the bottom,” said analyst Francis Lun of Geo Securities.

In New York, the futures contract for the S&P 500 gained 0.7 per cent to 2,684 while that for the Dow also rose 0.6 per cent, to 24,770, suggesting recent losses may have whetted appetites for bargains.

The Nasdaq composite, with its hefty roster of tech stocks, has now fallen more than 10 per cent below its August peak in what Wall Street calls a “correction.” Its 4.4 per cent tumble on Wednesday to 7,108.40 was its biggest drop since August 2011 but it is still up 3 per cent for the year.

The S&P 500 has lost about 9.4 per cent from its Sept. 20 peak and has given up its gains for the year, as has the Dow. The Russell 2000 index of smaller-company stocks is down 4.4 per cent for the year.

Disappointing quarterly earnings and outlooks are stoking investors’ worries that Corporate America’s tax cut-fueled earnings growth will fade in coming months as interest rates rise and the trade conflict with China raises costs.

Recent signs the housing market is cooling are adding to jitters over prospects for U.S. economic growth.

A shift into less volatile assets has pushed bond prices higher, sending the yield on the 10-year Treasury note down to 3.13 per cent from 3.16 per cent late Tuesday.

About 24 per cent of the companies in the S&P 500 had reported third-quarter results as of Wednesday. Of those, 57 per cent delivered earnings and revenue results that topped Wall Street’s forecasts.

More reports are due later Thursday in the U.S., including from Google parent company Alphabet, Amazon.com, Twitter and Comcast. In Europe, Daimler reported a drop in profits, as it had earlier warned it would, as did Nokia, which is waiting for global demand for new 5G networks to pick up.

As selling in stock markets abated, other markets also regained equilibrium.

Benchmark U.S. crude lost 6 cents to $66.76 per barrel in electronic trading on the New York Mercantile Exchange. On Wednesday it edged up 0.6 per cent Brent crude, used to price international oils, gained 4 cents to $76.21 a barrel.

The dollar rose to 112.27 yen from 112.23 yen. The euro rose to $1.1406 from $1.1393.

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Katie Tam in Hong Kong contributed to this report.

Elaine Kurtenbach, The Associated Press

by Canadian Press

Stocks recover in European trading; Wall Street seen rising

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