Global shares, commodities slide ahead of GDP report

Fri Oct 26, 2012 7:42am EDT
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By Richard Hubbard

LONDON (Reuters) - World shares and commodities fell as lackluster corporate earnings reports undermined investor confidence before the release of American growth data due out later on Friday.

Gloomy earnings and outlook statements from global giants like as Apple (AAPL.O: Quote) and Amazon (AMZN.O: Quote), South Korea's Samsung and Renault (RENA.PA: Quote) and Ericsson (ERICb.ST: Quote) in Europe have corroded hopes of a recovery in the global economy.

The FTSE Eurofirst 300 index .FTEU3 of top European shares was down 0.5 percent with London's FTSE 100 .FTSE, Paris's CAC-40 .FCHI and Frankfurt's DAX .GDAXI all around 0.5 to 0.7 percent lower. .L .EU

Efforts by the world's major central banks to boost activity and draw a line under the euro zone debt crisis, along with signs of a recovery in the U.S. economy, have been behind a strong rally in global equity markets this year.

But investors want to see the recovery confirmed by the U.S. GDP data, especially with uncertainty growing over the budget problems in Washington, known as the fiscal cliff, which could depress business activity early next year.

"What you have now is no additional oomph coming from the central bankers and you have the data seeming to weaken if you look at the more recent evidence," said William De Vijlder, chief investment officer at BNP Paribas Investment Partners.

"On top of that you have the never ending story of what is going to happen to the (fiscal) cliff, so that is not an environment where people, would say let's now go for equities."

The MSCI world equity index .MIWD00000PUS was down 0.5 percent on Friday at 327.90 points and in line for a loss of 1.85 percent this week, although it is still up an impressive 9.5 percent for the year to date.   Continued...

A visitor looks at market indices displayed at the Tokyo Stock Exchange in Tokyo September 26, 2012. REUTERS/Yuriko Nakao