World markets started off the week mixed. Wall Street rebounded somewhat and Asian markets advanced slightly.
The Dow Jones Industrial Average and S&P 500 closed up 0.8 and 0.5 percent respectively, recovering part of their Friday sell-off. The Nasdaq Composite squeaked out small gains, with biotechnology stocks pulling down the numbers.
The dollar and U.S. equity-index futures retreated trying to find the right position after the Fed’s decision last week not to raise interest rates. Industrial metals fell and oil gained.
The MSCI Asia Pacific excluding Japan Index rose, buoyed by Australian and Hong Kong shares. Australian bonds gave back Monday’s gains. Japan’s markets were closed for their National Day holiday.
The euro was little changed at $1.12 following a two-day decline of more than 2 percent. A representative at Goldman Sachs Group Inc. sees the single currency slipping as much as 10 U.S. cents should the European Central Bank go ahead with its proposed increased stimulus.
Continued Global Concern
Over all, the markets are showing continued concern over global turmoil and the crisis in China is seen as being far from over.
According to Bernard Aw, a strategist at IG Asia Pte in Singapore, “The Fed’s policy action or inaction is creating quite a bit of confusion in the market. The Fed is trying to soothe the market but it’s having the opposite effect. There’s a lack of conviction in the markets.”
Aw continued by saying that “…investors are reluctant to get back on the horse in the risk markets growing uncertainty. The Fed's inaction last week was a major factor behind the market participants' decision to sit on the side-lines at the moment.”