Market report: Wall Street wobbles, Asia reels

LONDON  (Capital Markets in Africa) – Weakness on Wall Street last night has followed through to Asian stock markets overnight. Tech stocks led Wall Street down last night, with the NASDAQ composite index falling by 0.8%, somewhat ahead of the 0.5% dip in the broader S&P 500 index. But the niggles about the course of direction that the Fed will take next year were picked up and amplified on the other side of the world, as Asian markets took a pounding overnight. November saw markets rallying on hopes that the US Federal Reserve was done with raising rates and would soon start to bring them back downwards in 2024. Last night the consensus turned more cautious, fretting that labour market data, due over the next week, could prove stronger than the Fed would want to see at this stage. Hong Kong and China took the worst of it, with the Hang Seng dropping 2.3% and the Shanghai index falling by 1.7%.

Gold took a rollercoaster ride yesterday, and, like most rollercoasters, it ended the day lower after briefly hitting all-time highs. Having surged by around 3% in early trading, hitting a record level of $2,135 per oz, the metal faded rapidly, finishing the day in negative territory. Sentiment around the Fed’s likely next moves seemed to be the culprit here too. With future interest rate expectations pushing higher, the opportunity cost of holding gold, which pays no return, is higher, dampening demand for the precious metal. In early trading on Tuesday, gold is trading a fraction better at $2,034, up about $8 on the close.

Everyone’s going back to the office rather than running the central heating during the day now it’s gone cold. At least that seems to be the message from SSP Group this morning. SSP run catering concessions in rail stations, airports and other high-traffic locations and they are seeing rapid recovery in commuter volumes currently. In their 2023 results, out this morning, they report revenues up 33% in North America, 14% in Europe and 22% here in the UK. Commuter volumes are recovering strongly and air passenger growth has been robust. Having seen revenues all but disappear in the pandemic, SSP now report that they are back above pre-pandemic levels in all major markets as workers return to their old habits.

Barclays shares are weak in early trading after the Qatari wealth fund dumped 361.7m shares in the bank onto the markets after last night’s close. The shares have coped reasonably well with the unexpected placing, dropping by just 3.4%, despite traders having to swallow over £500m of stock in a single gulp. With an upcoming strategy report due from Barclays, many in the markets found the timing of the deal a little odd. and suggested the Qataris are not optimistic about the bank’s plans. The deal represents about half of the position Qatar had remaining in Barclay after originally pouring in billions of pounds to support the bank during the financial crisis.

Steve Clayton, head of equity funds, Hargreaves Lansdown: