BUSINESS Stocks slip after strong gains

BUSINESS

Stocks slip after strong gains

AFP

19:45, June 28, 2021

Stock markets slipped Monday as traders booked profits after last week's rally that was triggered by easing concerns over strong inflation.

After the Federal Reserve watered down expectations of higher interest rates amid a spike in prices as economies exit lockdowns, attention is turning to key US jobs data at the end of week for fresh perspective on the outlook.

Investors are showing "caution after stock indices reached another record high last week", noted Naeem Aslam, chief market analyst at Avatrade.

Indices had "jumped as concerns over rising inflation were mitigated and after the (US) government struck an infrastructure deal on Thursday".

The bipartisan agreement between US lawmakers on a huge infrastructure deal provided an extra boost to already upbeat investors, who have also been calmed by Fed pledges to maintain record-low interest rates and vast stimulus for as long as the recovery needs.

After another record close Friday on Wall Street, Asia and Europe struggled to maintain momentum as the new trading week kicked off.

Elsewhere Monday, oil prices reached fresh 2.5-year peaks on demand optimism.

Traders are awaiting the monthly meeting of OPEC and other top producers Thursday, which is expected to see them lift output to ease fears over falling supplies.

Brent North Sea crude hit $76.60 per barrel and New York's WTI struck $74.45 -- the highest levels since October 2018.

Prices went on to slip slightly in midday European deals.

Bitcoin meanwhile jumped as investors shrugged off the UK financial watchdog's decision to ban cryptocurrency exchange Binance, as the digital money faces growing scrutiny.

On the corporate front, shares in Burberry tumbled eight percent after the British luxury fashion group said its chief executive Marco Gobbetti was stepping down at the end of the year to run Italian peer Salvatore Ferragamo.

"With the stock having only just recovered from its 2020 slump, investors will have the uncertainty of a new leader potentially shifting the strategy despite recent successes under Gobbetti," said Joshua Mahony, senior market analyst at IG trading group.

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