Nikkei Falls as Oil and Chip Stocks Hit Tokyo, While London and Toronto Rise

Stock markets split across the world as traders worked through oil above 100 dollars, a chip selloff and a run of holiday closures. Our markets watcher recorded the Nikkei 225 at 67,774.53, down 1.82 percent from 69,030.92. It put the FTSE 100 at 10,656.28 and the S&P/TSX Composite at 35,664.62. The three moves came in different sessions, and each had a clear local cause.

Tokyo drops after the holiday

Tokyo returned from a Monday public holiday and fell fast. Reuters said the Nikkei sank 2.6 percent in early trade on Tuesday, October 13, while The Wall Street Journal put the index down 2.0 percent at 67,644.31 early in the session. Chip and technology shares led the drop. The Journal listed Kioxia down 8.8 percent, Advantest down 7.0 percent and SoftBank Group down 6.1 percent. Reuters linked the fall to Brent crude at 105.9 dollars a barrel, near a two week high, attacks on Saudi Arabia, a fragile Russia and Ukraine energy truce, and a 0.5 percent overnight fall in the Nasdaq. The yen traded at 158.50 per dollar.

Banks lift London

London rose on Monday, October 12. The FTSE 100 closed at 10,656.28, and market wraps put the close up about 1 percent on the day. Reuters reported the index up 0.58 percent at 10,614.30 late in the morning, with HSBC, Lloyds, Barclays, NatWest and Standard Chartered up between 1.2 and 1.9 percent. Alliance News, via Morningstar, had the index up 0.7 percent at midday, with HSBC up 2.1 percent and Standard Chartered up 1.7 percent. Banks helped offset doubts about the energy truce and a sharp fall in recruiter Hays after a drop in net fees.

Toronto jumps on a jobs miss

Toronto's gain came on Friday, October 9. Reuters reported the S&P/TSX Composite ended up 519.24 points, or 1.48 percent, at 35,664.62, its biggest rise in five weeks. Canada lost 68,300 jobs in September, against a forecast gain of 9,200, and unemployment rose to 6.5 percent. Traders cut the chance of a Bank of Canada rate hike on October 28 to 25 percent, from 40 percent before the data. Aritzia jumped more than 20 percent after strong results. Materials rose 2.81 percent, technology rose 2.88 percent and financials rose 1.21 percent. Toronto was closed on Monday for Thanksgiving and reopens on Tuesday.

What happens next

The next test comes fast. Reuters said JPMorgan Chase, Goldman Sachs, Citigroup and Wells Fargo report earnings later on Tuesday. US inflation data follows on Wednesday. If oil stays high and bank results disappoint, Tokyo's drop could spread. If earnings hold up, London and Toronto show that rate relief still supports stocks outside technology.