US, European stocks shrug off China sell-off

New York (AFP) - US and European stock markets ended little changed Friday, shrugging off a steep sell-off in China sparked by news of investigations into several brokerages.

Wall Street trading was subdued in a shortened post-Thanksgiving holiday trading session, following market closures on Thursday, as shoppers swarmed to Black Friday sales in the kickoff weekend to the important year-end shopping season.

"Unsurprisingly, the Friday session was very quiet with trading volume running well below average," said.

Stocks had moved little in the week's first three days of trading. Markets were closed Thursday for Thanksgiving Day, and closed three hours early Friday, at 1800 GMT. No economic indicators were on the agenda.

"With nothing in the way of earnings or economic data to digest, traders will await Black Friday updates from retailers," said Alex Eppstein at Schaeffer's Investment Research.

The National Retail Federation will release spending results for the Thanksgiving holiday weekend on Sunday.

Retail stocks were mostly lower, including Dow member Wal-Mart, off 0.6 percent. In contrast, Target rose 0.4 percent, reporting a strong start to its Black Friday weekend, especially a 35 percent jump in online orders for in-store pickup on Thanksgiving.

The Dow Jones Industrial Average slipped 0.08 percent, the broad-based S&P 500 edged up 0.6 percent and the tech-rich Nasdaq Composite Index advanced 0.2 percent.

European markets drifted lower despite the sharp fall in Chinese stocks. "The reaction to the Chinese sell-off... in European stock markets has been limited," said CMC Markets analyst Jasper Lawler.

But they also failed to win a boost from the better-than-expected eurozone consumer confidence reading for November, broadly unchanged at the highest level since May 2011.

London's FTSE 100 and the Euro Stoxx 50 each lost 0.3 percent.

- Chinese brokerage probes -

A plunge in Chinese stocks triggered by a probe into several brokerages and profits sinking by far more than expected at the country's industrial giants dragged down Asian markets.

Selling intensified after Beijing said industrial profits fell more than forecast in October, and reinforcing worries about the world's number two economy, a key driver of global expansion.

China's biggest brokerage, Citic Securities, said Thursday it was being probed for suspected "rule violations" as officials crack down on financial firms in the wake of the summer equities sell-off.

And on Friday another giant, Guosen Securities, said it was being probed, while second-ranked Haitong Securities halted trading of its shares in Shanghai and Hong Kong.

Shanghai's stock market ended the day 5.5 percent lower, while Shenzhen's composite index, which tracks stocks on China's second exchange, slumped 6.1 percent.

"The biggest reason for such a sudden drop today is because of regulators' investigation of the top brokers. It has triggered a broader sell-off," Phillip Securities analyst Chen Xingyu told AFP.

"The investigation suggests the firms could be in some serious trouble," he said. But he added Friday's losses were "totally different from the routs in July and August."

Citic slumped by its 10 percent daily limit in Shanghai and almost five percent in Hong Kong, while Shenzhen-listed Guosen also tumbled 10 percent.

The sell-off reverberated in Asia, with Hong Kong ending down 1.9 percent, while Sydney lost 0.2 percent and Seoul shed 0.1 percent. There were big losses in Singapore, Taipei and Manila.

Japan's Nikkei ended in the red, down 0.3 percent, after the government said prices fell last month, while consumer spending also dropped, overshadowing news that unemployment was at a two-decade low.

Prime Minister Shinzo Abe will come under fresh pressure from the results as his program of big spending and massive monetary easing -- aimed at kick-starting growth and ending deflation -- struggles to kick in.

The Japanese economy slipped into recession in July-September -- for the second time since Abe took office in December 2012 -- and there is growing speculation the Bank of Japan will ramp up its bond-buying, which effectively prints cash in a bid to boost lending.

- Key figures around 2000 GMT -

London - FTSE 100: DOWN 0.3 percent at 6,375.15 points (close)

EURO STOXX 50: DOWN 0.3 percent at 3,488.99 (close)

New York - Dow Jones: DOWN 0.1 percent at 17,798.49 (close)

New York - S&P 500: UP 0.1 percent at 2,090.11 (close)

Tokyo - Nikkei 225: DOWN 0.3 percent at 19,883.94 (close)

Shanghai - composite: DOWN 5.5 percent at 3,436.30 (close)

Dollar/yen: UP to 122.85 yen from 122.57 yen late Thursday

Euro/dollar: DOWN to $1.0595 from $1.0613