Europe midday: Shares fail to cling on to gains after Wall St bounce
Not even a bounce in US markets could brighten the gloom across Europe as stocks slid into the red and investors picked among the scraps like Christmas lunch leftovers.
It all seemed cheery enough at the start of the day as European shares opened slightly higher, driven by the Dow Jones overnight surge of more than 1,000 points and a rise in Asian markets.
However by lunch it had all become too much as investors and traders sank back in their arm chairs and reflected on what had been a grim couple year for equities. The pan-European Stoxx 600 index was down by almost 1% and was staring at a near-15% fall in 2018.
Investors are still worried about the trade dispute between China and the US and a global economic slowdown.
In New York, the Dow Jones index racked up its biggest one-day points gain ever. This followed Wall Street’s worst-ever performance on Christmas Eve.
US investors took comfort from strong retail sales data over the Christmas period and comments by chair of the White House Council of Economic Advisers Kevin Hassett that Fed chairman Jerome Powell’s job was “100% safe”.
Markets had been spooked on Monday when rumours started circulating that President Donald Trump, furious at the Fed's decision to raise rates, was considering firing Powell.
"The surge in online purchases over the holiday season should be a reminder for the markets never to underestimate the purchasing power of the US consumer, as Mastercard payments tracking between November 1 and Christmas Eve leapt 5.1% from a year ago," said Stephen Innes, head of Oanda Asia Pacific trading.
In corporate news TechnipFMC led the risers on the back of a deal signed during the Christmas break with Malaysia Marine and Heavy Engineering Holdings and the Saudi Arabian Oil Company.
Shares in Vinci rose after the French construction group said it was buying a majority stake in London’s Gatwick airport for about £2.9bn ($3.7bn).