Stocks steady as G-20 finance ministers meet

AP News
Posted: Oct 22, 2010 12:02 PM
Stocks steady as G-20 finance ministers meet

World stocks were steady Friday as investors waited to see if finance ministers from the leading 20 industrialized and developing countries will be able to calm tensions in the currency markets during a meeting in South Korea.

In Europe, Germany's DAX was closed down 0.1 percent at 6,605.84 while the CAC-40 in France ended down 0.3 percent at 3,867.87. The FTSE 100 index of leading British shares was down 0.3 percent, at 5,738.97.

In the U.S., the Dow Jones industrial average was down 0.1 percent at 11,133.47 while the broader Standard & Poor's 500 index was up 0.2 percent to 1,182.03.

Stocks have been buoyed much of this week by a run of positive U.S. corporate earnings statements from the likes of Boeing, McDonald's and Goldman Sachs, as well as continuing expectations that the Federal Reserve will be pumping more money into the U.S. economy after its next policy meeting on November 3.

"Right now traders appear to be pausing for breath," said Anthony Grech, head of research at IG Index. "With little fundamental data due for release today, the temptation is probably to start unwinding some risk ahead of the weekend break."

The focus Friday is on the G-20 meeting in South Korea to see if ministers can make progress in resolving tensions over undervalued currencies that give some nations an unfair advantage in export markets. Over recent weeks, the euro has surged against the dollar to multi-month highs above $1.40 while the Bank of Japan has intervened to stem the yen's export-sapping rise.

China in particular is under renewed pressure over its management of the yuan, which the U.S., the European Union and Japan say is kept artificially low.

A proposal by U.S. Treasury Secretary Timothy Geithner for emerging nations to set targets to reduce their vast trade surpluses with the West met with immediate resistance.

According to officials at the summit, Geithner's idea is to establish numerical targets for current account balances, be they surpluses or deficits _ aiming to reduce conflicts over exchange rates by allowing the currencies of trade surplus countries to rise in concert.

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Investors remain skeptical that a 'grand bargain' will be achieved.

"Don't expect too much from the G-20 meeting beyond concerns over avoiding excessive volatility and disorderly price action," said Neil MacKinnon, global macro strategist at VTB Capital.

Ahead of the meeting, the euro was trading at $1.3917 while the dollar was at 81.44 yen, having fallen Thursday to a fresh 15-year low of 80.93 yen.

Earlier in Asia, Japan's benchmark Nikkei 225 stock index gained 50.23 points, or 0.5 percent, to 9,426.71 and South Korea's Kospi added 1.2 percent to 1,897.31.

Australia's S&P/ASX 200 added 0.6 percent to 4,648.20 while Hong Kong's Hang Seng slipped 0.7 percent to 23,480.81.

Elsewhere, China's Shanghai Composite index dropped 0.3 percent to 2,975.04.

Benchmark oil for December delivery was up 59 cents at $82.42 a barrel in electronic trading on the New York Mercantile Exchange.


Associated Press Writer Alex Kennedy in Singapore contributed to this report.