World markets recover after U.S. GDP

  @CNNMoneyInvest January 30, 2014: 10:48 AM ET
euronext 2013 01 30

European markets recovered after the latest U.S. GDP data was released.


European stocks recovered from early losses Thursday on strong U.S. GDP data after Fed tapering and worries about emerging markets kept Asian investors on edge.

European markets were in negative territory for much of the day but rallied after the U.S. Commerce Department reported strong economic growth in the final three months of 2013.

Meanwhile Asian markets dropped Thursday, closing before the U.S. growth data was released.

The falls in Asia followed a sharp decline in U.S. equities Wednesday after the Federal Reserve announced it would continue cutting back on its stimulus measures.

Japan's Nikkei dropped 2.5%, while Hong Kong's Hang Seng shed 0.5% and the Shanghai Composite closed down 0.8%. The Australia ASX All Ordinaries also lost 0.8%.

The move down in Asian markets may have been exaggerated by low volumes, said ETX Capital market strategist Ishaq Siddiqi, noting that the Chinese lunar new year likely distracted many traders.

World markets have been rattled in recent weeks by growing fragility in Turkey, India, Brazil, Indonesia and South Africa as the Fed rolls back the bond-buying program that has supported economic growth and flows of cash into emerging markets.

Weakness in China's all-important manufacturing sector has only added to worries.

Related story: Google to sell Motorola Mobility unit to Lenovo

Emerging market currencies have suffered a broad decline, and even drastic efforts to control the situation appear to be falling short.

On Tuesday, Turkey's central bank increased its key overnight lending rate to 12% from 7.75%.The Turkish lira fell further Wednesday.

India and South Africa have also raised rates this week to stabilize shaky currencies. The Argentinian peso has been in free fall since Argentina's government moved to devalue the currency last week.

Is it game over for Nintendo?

Many emerging markets have benefited over the past few years as the Fed and other central banks have pumped money into the global economy.

But investors have been pulling out of emerging markets this year now that the Fed has begun to scale back its bond buying. The central bank said Wednesday that it would reduce its bond-buying program to $65 billion a month from $75 billion.

The bet is that higher rates in the U.S. and a stronger dollar will make emerging market investments far less attractive. To top of page

Join the Conversation
Sponsored by
Index Last Change % Change
Dow 16,331.54 68.98 0.42%
Nasdaq 4,045.68 11.52 0.29%
S&P 500 1,849.58 6.60 0.36%
Treasuries 2.65 0.02 0.84%
Data as of 11:10am ET
Company Price Change % Change
Bank of America Corp... 15.92 -0.47 -2.87%
Yahoo! Inc 36.04 1.84 5.36%
Facebook Inc 58.06 -1.03 -1.74%
Intel Corp 26.68 -0.09 -0.32%
Microsoft Corp 40.02 0.27 0.69%
Data as of 10:55am ET
Overnight Avg Rate Latest Change Last Week
30 yr fixed4.26%4.48%
15 yr fixed3.30%3.31%
5/1 ARM3.30%3.35%
30 yr refi4.25%4.45%
15 yr refi3.29%3.34%
View rates in your area
Find personalized rates:
Rate data provided
Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer LIBOR Warning: Neither BBA Enterprises Limited, nor the BBA LIBOR Contributor Banks, nor Reuters, can be held liable for any irregularity or inaccuracy of BBA LIBOR. Disclaimer. Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.