GLOBAL stock markets fell yesterday, with key New York indexes ending in a sea of red as traders grappled with inconclusive US election results and upheaval in the cryptocurrency market.

Wall Street stocks tumbled, with the Dow losing nearly 650 points, snapping a three-day rally partly built on expectations that Republicans would win at least one chamber of Congress from US President Joe Biden’s Democratic party – bringing about a gridlock scenario seen as benign for markets.

For now, Republicans appeared headed for a narrow majority in the US House of Representatives, although gains were slimmer than expected.

“The stock market had a nice, little run leading up to election day based on the gridlock angle,” said Patrick O’Hare at Briefing.com.

“It appears that is going to be the case, so participants are taking some money off the table,” he added.

Investors also took note of the continued slide of Bitcoin which tumbled on fallout from the near-collapse of cryptocurrency platform FTX, reaching a low at US$16,034.70.

Binance, the world’s biggest cryptocurrency platform, announced it was ending plans to acquire rival FTX.com a day after disclosing it signed a non-binding letter of intent to buy FTX.

“Even if you are not involved in cryptos, the turmoil is definitely something to keep an eye on, as it may be an additional factor impacting risk appetite across the financial markets,” said market analyst Fawad Razaqzada at City Index and FOREX.com.

The Dow Jones Industrial Average fell by nearly 2%, while the broad-based S&P 500 lost 2.1% lower and the tech-rich Nasdaq Composite Index slumped as well.

But the dollar rose strongly against the British pound, which has been under pressure owing to the UK’s bleak economic outlook.

Oil prices dipped as well, as official data from China showed the world’s second-largest economy languishing under its strict zero-Covid policy, and US stockpiles increased.

‘No good news from China’

In China, speculation over how long Beijing will keep its harsh Covid-19 policies including lockdowns and mass testing has fuelled volatility on markets, despite the government vowing it will not change course.

The restrictions have taken a toll on the Chinese economy, with data Wednesday showing China’s producer price index fell 1.3% year-on-year in October, pushing it into negative territory for the first time since December 2020.

The consumer price index (CPI) – the main gauge for retail inflation – rose 2.1% from a year ago in October, moderating slightly from September’s two-year high.

“The economy’s slowing, confirmed by the CPI data,” Iris Pang, chief economist for Greater China at ING Wholesale Banking, told AFP. 

“I don’t see any good news from China.”

Inflation will also be in focus today with the much-anticipated US CPI data, which will be analysed for its implications for US monetary policy.

Key figures around 2130 GMT

New York - Dow: DOWN 2.0% at 32,513.94 (close)

New York - S&P 500: DOWN 2.1% at 3,748.57 (close)

New York - Nasdaq: DOWN 2.5% at 10,353.175 (close)

EURO STOXX 50: DOWN 0.3% at 3,728.03 (close)

London - FTSE 100: DOWN 0.1% at 7,296.25 (close)

Frankfurt - DAX: DOWN 0.2% at 13,666.32 (close)

Paris - CAC 40: DOWN 0.2% at 6,430.57 (close)

Tokyo - Nikkei 225: DOWN 0.6% at 27,716.43 (close)

Hong Kong - Hang Seng Index: DOWN 1.2% at 16,358.52 (close)

Shanghai - Composite: DOWN 0.5% at 3,048.17 (close)

Pound/dollar: DOWN at US$1.1352 from US$1.1544 on Tuesday

Euro/dollar: DOWN at US$1.0017 from US$1.0076

Dollar/yen: UP at ¥146.37 from ¥145.58

Euro/pound: UP at 88.19 pence from 87.26 pence

West Texas Intermediate: DOWN 3.5% at US$85.83 per barrel

Brent North Sea crude: DOWN 2.8% at US$92.65 per barrel – AFP, November 10, 2022.