Monday, December 27, 2010

Wall Street unstable after China rate hike, volume thin

US stocks slipped initially as a surprise interest rate hike from China's central bank over the weekend prompted investors, worried about demand, to sell equities.

The Dow Jones industrial average fell 18.46 points, or 0.16 percent, at 11,555.03. The Standard & Poor's 500 Index rose 0.77 points, or 0.06 percent, at 1,257.54. The Nasdaq Composite Index increased 1.67 points, or 0.06 percent, at 2,667.27.

European stocks closed lower in extremely thin trade also hit by China's interest rate rise fuelling concerns about economic growth.

The FTSEurofirst 300 provisionally closed down 0.8 percent at 1,137.80 points, with German carmakers Volkswagen and BMW the worst hit, both down over 5.5 percent.

Japan's Nikkei average rose 0.8 percent in thin trade as increased appetite for lagging Tokyo stocks in recent weeks helped to offset concerns over China's weekend interest rate hike.

The benchmark Nikkei finished 0.8 percent or 76.80 points higher at 10,355.99, some 40 points shy of a seven-month high reached last Wednesday. It closed at 10,546.44 in 2009.

The broader Topix index gained 0.3 percent to 904.68.