A red start for the Dow Jones contributed to the overall waning of positivity on Wednesday, with pre-EU summit nerves and Italy’s budget problems adding to the general malaise.
After Tuesday’s earnings-driven surge, the Dow Jones was on the wrong side of the reporting calendar as the bell rang on Wall Street, with a 6.5% slide from IBM (NYSE:IBM) helping to drag the index 200 points lower. That the dollar was up against both the pound and the euro also played its part, as did, perhaps, the anticipation of the evening’s Fed meeting minutes given October’s renewed interest in the central bank’s interest rate plans.
Over in the Eurozone the DAX and CAC found themselves down 0.7% apiece, their decline potentially related to the fact that German newspaper Spiegel has reported the European Commission has decided, unsurprisingly, to reject Italy’s budget proposal. Considering a recent poll suggested less than half of Italians would choose to remain in the EU, this stand-off could have even more serious ramifications down the road.
Staying with the EU, the evening’s Brexit-focused summit in Brussels is likely going to dominate headlines – and trading – tomorrow morning, and has, alongside September’s inflation miss, kept the pound in a jittery mood. Against the dollar it fell 0.4%, causing cable to duck under $1.314, while against the euro it slipped 0.1%, the latter loss lighter due to the single currency’s Italian issues. The wider market-decline meant the FTSE couldn’t use this to its advantage, however, with the UK index slipping 0.3% as the day went on.
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