Beijing (AP) The world's market prices fell Monday as Europe confronted a new pressure in Russian gas supplies.
London and Frankfurt started the day lower. Tokyo, Hong Kong and South Korea fell, while Shanghai was up. Prices for oil increased by over $2 per barrel, while the euro dipped.
Markets were rattled with turmoil following Russian gazprom's energy company's decision on Friday that the suspension of gas deliveries via Nord Stream 1 pipeline would be extended for a period of indefinite time. This causes shortages in Germany as well as other countries.
In the early hours of trading, the FTSE 100 in London lost 1.1 percent up to 7,198.73 as did the DAX in Frankfurt which dropped 3.2 percent to 12,628.44. The CAC 40 index in France decreased by 2% to 6,047.28.
Gazprom's announcement places European stock markets at “heavy pressure,” said Chris Turner of ING in an article.
Also on Friday, U.S. government data indicated that the pace of hiring decreased in August, however wages increased dramatically. Forecasters suggested that it is possible that the Federal Reserve might see that as a sign that more rate increases are required to reduce inflation, which is at an all-time high of four decades.
“Markets relinquished early optimism for a sense of foreboding,” said Tan Boon Sheng at Mizuho Bank in a report.
On Wall Street, the S&P 500 future was down less than 0.1 percent. The Dow Jones Industrial Average gained less than 0.1 percent.
The Dow also dropped 1.1 percent on Friday, after the Labor Department reported the U.S. economy increased employment by 315,000 in August. This was lower than July's 526,000. However, the average hourly wage jumped by an astonishingly large margin of 5.2 percent compared to the same time last year.
The Nasdaq composite fell by 1.3 percent.
In Asia, the Shanghai Composite Index advanced 0.4 percent to 3,199.91 following the Chinese government tightening its controls on the movement of people within the southern business district of Shenzhen due to the spread of viruses.
The Nikkei 225 in Tokyo fell 0.1 percent, down to 27,619.61, as the Hang Seng in Hong Kong tumbled 1.2% to 19,225.70.
The Kospi in Seoul fell 0.2 percent to 2,403.68 and Sydney's S&P-ASX 200 gained 0.3 percent to 6,852.20.
Bangkok and New Zealand both declined while Singapore and Jakarta increased.
European economies face a shortage of gas following their governments' agreement to cut off purchases from Russia to take a smackdown at the Kremlin for its invasion of Ukraine.
The week before, Gazprom announced the suspension of three days of gas deliveries up to Nord Stream 1 in order to complete urgent repairs.
The company on Friday stated that the deal would be extended for an indefinite period. Russia has already cut the amount of supplies it provides to countries that have been in agreement with Ukraine.
In the meantime, traders are unintentionally following the Fed following the announcement of the chair Jerome Powell said Aug. 26 that interest rates need to be kept at a high level to control soaring inflation. The announcement shattered the hopes that the Fed could ease up because of indications that U.S. economic activity is slowing.
The Fed has increased rates four times in the last year twice with a difference of 0.75 per cent, which is triple the margin it normally uses.
Central banks across Europe and Asia have also raised rates, causing fears that they may stall the global economy.
The U.S. market has given away a lot of gains it made in August and July as traders hoped that the Fed would ease off.
The traders are expecting an additional 0.75 percent rate increase during this month's Fed meeting according to the CME Group.
In the energy market, the benchmark U.S. crude gained $2.18 to $89.05 per barrel during trade on electronic platforms like the New York Mercantile Exchange. The contract gained 26 cents, or $86.87 in the last trading session of Friday. Brent crude, which is the that is used to determine the price of international oil trade, was up $2.54 in price to $95.56 each barrel at London. The price climbed 66 cents from the previous session and reached $93.02.
The dollar climbed to 140.50 yen on Friday, up from 140.13 yen. The euro fell to 99.26 cents, down from 99.64 cents.
