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Fragile sentiment as global market sell-off eases

There are signs the global stock market rout is easing after Asian equities failed overnight to follow US shares sharply lower.

New York’s Dow Jones Industrial Average had closed more than 500 points, or 2%, down during Thursday’s session following a 3% fall the previous day.

There had earlier been a further dip for the FTSE 100 in Britain, which saw £36bn wiped off the value of its constituent companies – taking the total loss over two days to £60bn.

Traders look at screens during a stock market fall
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European markets are currently tipped to open positively on Friday

But Asia started Friday on a largely positive footing, with analysts pointing to some cautious buying opportunities being taken.

The Nikkei in Japan was 0.5% higher while the Hang Seng in Hong Kong was 1.6% up.

The main markets in Europe were also forecast to open in positive territory but also with subdued sentiment, with the FTSE 0.5% up, while Dow Jones futures pointed to a 1% rise on opening later in the day.

Market experts have pointed to a cocktail of worries for stock market investors that have been building in recent weeks.

:: The global stock market sell-off explained

Chief among them is the rising path of US interest rates, which it is feared could put the brakes on the world’s biggest economy by adding to borrowing costs for consumers and businesses.

Adding to the anxiety is the uncertainty caused by US president Donald Trump’s trade war with China as well as the sharp upturn in yields on bonds – parcels of US government debt – which is diverting some investor attention from stocks.



A trader works on the floor of the New York Stock Exchange (NYSE) in Manhattan in New York




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Louise Dudley, global equities portfolio manager at Hermes Investment Management discusses what’s behind the stock market slump, with Sky’s Ian King

The ongoing market turmoil prompted Mr Trump to lash out at the US Federal Reserve – accusing the central bank of being “out of control” after a series of interest rate hikes.

But the Fed – led by Mr Trump’s hand-picked chairman Jerome Powell – won backing from International Monetary Fund chief Christine Lagarde, who said that raising rates in economies like America’s was “clearly a necessary development”.

Mr Trump conceded to White House reporters that he was “not going to fire” Mr Powell.

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