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Mixed day for global stocks amid troubles with Brexit, US tech

Volatility becoming the norm for this month — Hogan

By AFP - Sep 13,2020 - Last updated at Sep 13,2020

Traders work on the floor at the opening bell of the Dow Industrial Average at the New York Stock Exchange in New York, on March 18 (AFP file photo)

NEW YORK — World stock markets were mixed on Friday as European traders mulled Britain's increasingly acrimonious war dance with the EU, while in the United States technology shares continued to pull back.

Sterling remained under pressure as Britain sparred with Brussels, rejecting an ultimatum to withdraw controversial Brexit legislation but agreeing to extend talks soon.

On the plus side for British industry, a stuttering currency — which hauled itself off multi-month midweek lows — has been helping to boost share prices of index multinational's earnings in dollars.

Those increases helped London's FTSE index gain ground on Friday.

After Thursday's sterling selloff, the pound was stable on Friday amid news the British economy expanded 6.6 per cent — albeit still well off pre-coronavirus levels.

"Ultimately UK investors will probably thank the UK government for pushing down sterling and allowing the FTSE the room to recover 6000 [points]," said Chris Beauchamp, chief market analyst at IG.

"Given time, however, we can expect the index to return to its dismal ways, as the global investing community picks the more solid performers on Wall Street over an increasingly fraught UK outlook."

Meanwhile, US stocks concluded a volatile week on a mixed note, with the Dow rising and the Nasdaq suffering its fifth decline in six sessions.

Tech shares have been under pressure since hitting a record on September 2, with investors questioning skyrocketing stock values.

Markets are also assessing the timing of vaccine candidates for Covid-19 and how much a vaccine could erode the advantage tech companies have attained from higher demand for e-commerce and digital services if the economy normalises quickly.

Art Hogan, chief market strategist at National Securities, said September has historically been volatile month for equities. 

This year, there is also unease about the upcoming presidential election, rising tensions between Washington and Beijing and worries over coronavirus outbreaks, including at colleges, Hogan said.

"Volatility is going to be norm for the balance of this month and probably October also," he said.

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