Volkswacht Bodensee - Markets wobble as recession talk builds

European markets closed higher while Wall Street was mixed near midday, with the Dow falling, the S&P 500 flat and the tech-rich Nasdaq rising. Asian markets also diverged.

"Growing recessionary concerns cast a pall over markets," said analyst Richard Hunter at trading firm Interactive investor.

"A number of US releases suggested that the economy is beginning to wilt under the pressure of the Federal Reserve's aggressive (interest rate) hiking policy, with attention now turning to the scale of a recession, rather than whether one will happen."

Focus turns to the release of key US non-farm payroll figures on Friday, which will provide the latest snapshot of the world's biggest economy.

Fresh US government unemployment figures on Thursday showed there were 228,000 new applications for unemployment aid last week, more than the 200,000 expected by analysts.

Friday's jobs figures could be crucial to determine the Fed's next interest rate decision.

But all three major European markets and Hong Kong will be shut on Friday and Monday for a four-day Easter holiday weekend.

Wall Street will be closed on Friday but open on Monday, with Tokyo, Shanghai and Shenzhen working on both days.

"The closure... on Friday means that equity traders will be unable to react to the release until next week which, coupled with the long weekend, has seen some traders squaring positions and being unwilling to open new ones given the extended break," Hunter added.

After a few weeks of gains fuelled by hopes the Fed would soon take its foot off the pedal in tightening monetary policy, data this week has fanned talk that its year-long hiking campaign may have gone too far.

"Recent data from the US has raised the likelihood of a recession in the world's largest economy," said Fawad Razaqzada, market analyst at City Index and Forex.com.

"In contrast, European data have been mostly encouraging in recent weeks," Razaqzada said.

Economic institutes earlier said this week that Germany would escape recession this year after all and grow 0.3, while fresh data on Thursday showed industrial production rose more than expected in Europe's biggest economy in February.

On Wednesday, a report from the Institute for Supply Management showed the US services sector grew less than forecast last month, while another pointed to private employers slowing their hiring pace in March.

The readings came a day after news that job openings had fallen to their lowest level since May 2021.

While traders have long hoped for a tightening of the labour market and an economic slowdown that would allow the Fed to stop lifting rates, there is now a rising concern of a deep recession.

Adding to the unease is ongoing uncertainty about the banking sector after last month's turmoil that saw three US regional banks go under and Credit Suisse taken over.

The upheaval was largely blamed on the sharp pace of rate hikes over the past year.

IMF chief Kristalina Georgieva said Thursday that a continued slowdown in almost all the world's advanced economies is expected to drag global growth below three percent this year.

- Key figures around 1545 GMT -

New York - Dow: DOWN 0.2 percent at 33,423.03 points

London - FTSE 100: UP 1.0 percent at 7,741,56 (close)

Paris - CAC 40: UP 0.1 percent at 7,324.75 (close)

Frankfurt - DAX: UP 0.5 percent at 15,597.89 (close)

EURO STOXX 50: UP 0.3 percent at 4,309.45 (close)

Tokyo - Nikkei 225: DOWN 1.2 percent at 27,472.63 (close)

Hong Kong - Hang Seng Index: UP 0.3 percent at 20,331.20 (close)

Shanghai - Composite: FLAT at 3,312.63 (close)

Euro/dollar: UP at $1.0922 from $1.0904 on Wednesday

Pound/dollar: DOWN at $1.2446 from $1.2462

Euro/pound: UP at 87.76 pence at 87.50 pence

Dollar/yen: UP at 131.72 yen from 131.32 yen

Brent North Sea crude: FLAT at $85.03 per barrel

West Texas Intermediate: FLAT at $80.62 per barrel

burs-rfj-lth/ach

O.Lorenz--BTB