Major stock markets mostly retreat

LONDON (AFP): Major stock markets mostly slid and the dollar faltered Wednesday, fuelled by concerns for the banking sector and broader fears of global recession this year.

Tokyo and European indices headed south following Wall Street losses Tuesday.
This followed lacklustre US consumer data and as traders tracked earnings reports.
“Realisation is dawning that more ominous clouds are gathering over the US economy, causing fresh nervousness for investors,” noted Susannah Streeter, head of money and markets at Hargreaves Lansdown.

Those concerns were top of mind for traders after US-based First Republic Bank disclosed it lost more than $100 billion in deposits in the first quarter, intensifying concerns about its long-term prospects after the failures of other mid-sized banks. Shares of First Republic plunged 49 per cent, pressuring other regional banks that have been seen as vulnerable.

Meanwhile, the US Conference Board reported a bigger-than-expected drop in consumer confidence in April. Also weighing on sentiment was the question of interest rates, with Sweden’s Riksbank on Wednesday hiking its guiding rate by a half-point to 3.5 percent as it tried to rein in double-digit inflation.

The US Federal Reserve is also mulling further inflation-fighting hikes.

Oanda senior market analyst Edward Moya said the overall outlook suggested “the Fed can stay on their tightening course with the risks of a June hike still remaining on the table”.

On the corporate front, Google parent company Alphabet beat market expectations in the first quarter of 2023 with a net profit of $15 billion, the company said after the close of Wall Street on Tuesday.

Microsoft’s results for the first three months of the year also pleased investors, lifted by its industry-leading business cloud products.