Market update: Investors remain cautious ahead of possible Fed tapering – 12.12.2013

Source: Henderson Global Investors

Wall Street stocks finished lower yesterday with the Dow Jones and the S&P 500 down 0.8% and 1.1% respectively as investors remain cautious ahead of the possibility of Fed tapering following news of a provisional budget deal reached in Washington. Shares in MasterCard jumped 3.5% after the company raised its quarterly dividend and announced a new $3.5 billion buyback programme. Elsewhere, shares in Costco fell after the discount retailer’s first-quarter profit missed estimates due to lower gasoline prices and weak foreign currencies.

In Asia, Japan’s Nikkei 225 lost 1.1% but was supported by the yen halting its recent rally, with the currency currently shedding 0.4% versus both the euro and dollar. In China, Hong Kong’s Hang Seng Index fell 0.5% while the Shanghai Composite eased 0.1%. Chinese equities have been supported by Wednesday’s data showing ample money supply, in spite of the People’s Bank of China’s long-running efforts to rein in credit growth.

European bourses are lower this morning with both the FTSE 100 and the FTSE Eurofirst 300 down 0.4%. Shares in UK energy services company John Wood Group are down 13% after the company said that profits within its engineering unit and its gas turbine operations would fall by around 15% in 2014. Elsewhere, shares in Sports Direct are 4% lower after the company revealed that it was not considering resuming a regular dividend payment along with reporting its half-year results.