US recovers as investors seek focus in global economy
Following the 1,000-point rise in the Dow Jones on Wednesday on hopes based on stronger retail figures, all US indices initially fell sharply Thursday before recovering to close 1.14% higher.
However, all three US major indices remain down more than 9% for December following losses earlier in the month
London’s FTSE 100 slid as the day progressed, ending 1.5% down, with UK shares at their lowest in over two years.
Frankfurt’s Dax was 2.8% lower, while the Cac 40 in Paris suffered a smaller fall, down just 1.1%.
China offered hints of a global slowdown, while tensions in Washington also weighed on investor sentiment.
President Donald Trump said he is preparing to wait until funding is approved for his US-Mexico border wall, a demand that has triggered a partial shutdown of the federal government that is now in its fifth day.
He is also said by Reuters news agency to be considering an executive order in the new year that would bar US companies from using telecommunications equipment made by China’s Huawei Technologies Co, a move that may stoke further tension as trade talks resume.
A survey of company directors from the Institute of Directors also weighed on sentiment, as it revealed that business confidence in the British economy has declined to the lowest level since the EU referendum.
About 57% of more than 700 company directors surveyed said they expected things to get worse, while less than 20% expected an improvement. This was the worst net score since the IoD started its confidence survey in 2016.
Retailers were mixed on the back of the latest data from Springboard which showed that the number of people heading off to the Boxing Day sales has dropped for the third year running despite heavy discounting.
According to Springboard, the number of shoppers to shopping centres, high streets and retail parks had fallen 3.1%year-on-year.