A roundup of trading on major world markets:
NEW YORK – US stocks have closed lower, ending a volatile week with their worst five-day start to a year ever, as sliding oil prices and lingering worries about the global economy offset upbeat US job growth.
Both the Dow and S&P 500 had their worst five-day starts in history, with the Dow falling 6.2 per cent for the week and S&P 500 sliding 6 per cent. The Nasdaq was down 7.3 per cent this week.
All three indexes saw losses accelerating into the close on Friday.
The market had opened higher after data showing US nonfarm payrolls surged in December and the unemployment rate held steady. But that was not enough to keep stocks in positive territory.
Oil prices fell for a fifth day and Brent lost 10 per cent for the week, while the S&P energy sector also extended this week’s slide, ending the day down 1.3 per cent.
Fears of a slowdown in China and the global economy spooked investors this week, creating a turbulent start to the trading year.
“The start of the year is very poor, so that’s got investors on the defensive,” said Bucky Hellwig, senior vice president at BB&T Wealth Management in Birmingham, Alabama.
“In the face of weakening global growth … it’s difficult to find reasons to commit money at this point even if one is bullish,” he said, adding that he expects stocks to rebound from these oversold conditions next week.
The Dow Jones industrial average was down 167.65 points, or 1.02 per cent, to 16,346.45, the S&P 500 lost 21.06 points, or 1.08 per cent, to 1,922.03 and the Nasdaq Composite dropped 45.80 points, or 0.98 per cent, to 4,643.63.
LONDON – Top UK shares have taken their biggest tumble in the first week of a year since 2000 as China’s decision to let the yuan weaken rattled global markets.
The UK’s FTSE 100 had opened higher on Friday after Chinese stocks regained some poise following a plunge the previous day.
However, traders said the unpredictability of the previous week prompted investors to sell out of their positions before the weekend for fear of being caught in volatility on Monday.
“We saw a bit of buying early doors, but that seems to have petered out, as no one wants to go into the weekend holding long positions, given how volatile crude oil and other commodities are at the moment,” said Manoj Ladwa, head of trading at TJM partners.
The energy sector trimmed 26 points off the index, which closed down 41.64 points, or 0.7 per cent, at 5,912.44, with losses sharply extended in the last hour of trade.
The FTSE 100 hit a three-week low on Thursday, when STG33 billion ($A68.89 billion) was wiped off its market capitalisation as stocks in China sank and Beijing allowed the biggest fall in the yuan in five months.
The index was down 5.3 per cent on the week, in its biggest weekly slump since last August, when China similarly roiled stock markets by allowing its currency to weaken.
HONG KONG – Gains by Chinese stocks, a steadier yuan and a recovery in oil prices have helped calm frazzled investors just in time for the first US payrolls report of the year.
China on Friday nudged the yuan higher for the first time in nine days, easing fears that it had lost control of the currency.
Traders also cheered its decision to dump an unpopular stock market “circuit-breaker” system introduced this week, helping to restore a measure of risk appetite.
After a 10 per cent-plus drop in Chinese equities, an equally dramatic slump in oil and major volatility in other markets, a 2.0 per cent rise by Chinese shares helped Asia end higher for the first time in 2016.
“We’ve had a stabilisation in China overnight, but the question remains as to whether China’s economy is headed for a hard or soft landing,” said Richard McGuire, senior fixed income strategist at Rabobank.
Japan’s Nikkei surrendered earlier gains to end the day down 0.4 per cent at its lowest closing price since September 30. That extended losses for the week to 7 per cent, the biggest weekly decline in four months.
WELLINGTON – The S&P/NZX 50 Index fell 55.29 points, or 0.9 per cent, to 6158.1.
