LONDON/NEW YORK, 16 October 2003 — The euro lost ground against the dollar in London yesterday as traders favored the US currency despite a slide in September retail sales in the United States. The single currency in late-day trade was at 1.1653 dollars, down from 1.1729 in New York late on Tuesday. The dollar was trading at 109.59 yen against 108.87 on Tuesday.
Traders took heart at the Empire State Index of manufacturing activity in New York, which rose to a record 33.7 in October from 18.4 in September. The sharp rise was a surprise to economists who had forecast a decline to 16.7. “This report provides further evidence that manufacturing activity is on a sharp cyclical upswing,” said Bear Stearns economist John Ryding.
In addition, September retail sales figures were not as lackluster as some in the market had anticipated. While sales fell by 0.2 percent they were in line with expectations. Neil Mackinnon, a hedge fund economist, said the dollar was benefiting from a raft of better data, particularly against European currencies.
US stocks seesawed around the peaks for the year they hit the day before, as companies reported strong earnings but some investors took the opportunity to sell shares at longtime highs. By midmorning, the blue-chip Dow Jones industrial average was down 10.38 points, or 0.11 percent, at 9,802.60. The broader Standard & Poor’s 500 Index was down 1.98 points, or 0.19 percent, at 1,047.50. But the technology-laced NASDAQ Composite Index was up 3.59 points, or 0.18 percent, at 1,946.78.
Tech heavyweight Intel Corp. set the tone in early trading, leading the Dow in gains as it hit an 18-month high. Its shares pared gains later in the morning, trading up $1.22, or 3.9 percent, at $32.29.
Asian stock markets closed generally firmer yesterday, finding support on continued gains overnight on Wall Street where sentiment got a boost from chip giant Intel’s solid third quarter results, dealers said.
Japanese share prices fell 0.61 percent as investors took profits on recent sharp gains, dealers said. The Tokyo Stock Exchange’s Nikkei-225 index lost 66.48 points at 10,899.95, while the broader TOPIX index of all first-section shares declined 0.64 percent or 7.01 points to 1,080.30, after hitting a 16-month high on Tuesday.
South Korean share prices closed 0.3 percent lower in a modest correction as Samsung Electronics and other large-cap stocks came under profit-taking pressure, dealers said. The composite index closed down 2.29 points at 764.23, off a high of 773.13 and a low of 759.86, as shares lost most of the early gains made on Wall Street’s overnight rally.
Hong Kong share prices closed up 1.69 percent yesterday at a 26-month high after breaching resistance at 12,000 points on futures-linked buying following overnight gains on Wall Street, dealers said. The key Hang Seng Index gained 200.16 points to close at 12,056.18 on turnover of 14.29 billion Hong Kong dollars ($1.83 billion).
Singapore share prices closed 1.05 percent higher, dealers said. The Straits Times Index gained 18.23 points to close at 1,748.96 and the All-Singapore Equities index was up 5.09 points at 479.57.