European bourses
EUROPEAN OUTLOOK & US/ASIAN SUMMARIES:
Asian markets are selling off in response to Wall Street's plunge overnight, but strategists tend to view this as an overdue correction and doubt the selling will degenerate into a full-blown bear market. European bourses are likely to start a bit higher, with government bonds offering a safe-haven going into the weekend. The euro is weaker, while oil futures are higher and spot gold is little changed.
STOCKS:
European stock markets may open up slightly on Friday with Greece's fiscal crisis weighing but sterling earnings from Microsoft and Amazon providing some support.
For Friday's opening, IG Markets is calling the FTSE up 7 at 5152, the DAX up 21 at 5561 and the CAC up 2 at 3691.
Armando Guglielmetti, senior strategist at InvestNews.ch in Switzerland, looks for the euro-zone worries and weakness in technologies earlier to spill over to hurt the cyclicals Friday. Financials may see a bit more selling although room for a further downward move is diminishing.
Mounting concerns over Greece's ability to repay its sovereign debt have stoked fresh jitters about credit, said Mike Jones, currency strategist at the Bank of New Zealand. Equity and foreign exchange markets may continue to wobble in the near term if the debt problems escalate, he said.
"The tightening coming out of China and the expectation of more tightening coming out of India are making people concerned that what had been a disproportionate source of growth over the past year is starting to be under pressure," said Bob Browne, chief investment officer at Northern Trust Global Investments.
Wall Street futures are slightly lower on Friday, despite strong results from Microsoft and Amazon overnight.
U.S. stocks slumped Thursday, led by the technology sector, as a forecast cut from Qualcomm, a bigger-than-expected revenue drop from Motorola and apparent disappointment over Apple's latest product weighed.
Investors' disappointment with tech stocks on Thursday came as the broader market was weighed upon by worse-than-expected reports on jobs and durable goods, as well as continued global concerns. Market participants are especially worried about how companies that have benefited from strong growth in China, especially in the materials sector, will be affected by monetary tightening there.
Still, Northern Trust's Browne said, "We don't see long-term fundamental indicators that would suggest a long, painful sell-off." The Federal Reserve Board is likely to keep interest rates near zero for months, he said. "We're not worried about this turning into an onslaught by any means."
Most Asian stock markets are trading sharply lower Friday after Wall Street's losses, with the tech and resources sectors leading declines as a renewed bout of risk aversion hits markets.
(MORE TO FOLLOW) Dow Jones Newswires
January 29, 2010 01:01 ET (06:01 GMT)
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