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Global stocks mixed amid lingering trade war fears
NEW YORK, June 21, 2018 (BSS/AFP) – World stock markets were a mixed bag
on Wednesday as some investors fished for bargains and others gave in to
anxiety over simmering trade tensions between China and the United States.
London and Frankfurt edged higher, mirroring earlier gains in Asia, while
Paris was down at the European close.
Wall Street stocks were also mixed, with the Nasdaq jumping to a fresh
record close and the Dow dipping.
Large tech companies such as Facebook and Microsoft scored solid gains,
while Twenty-First Century Fox surged 7.5 percent after Disney lifted its bid
for key assets of the media giant in the latest move in a burgeoning bidding
war with Comcast.
Analysts said many market players could not get themselves to believe that
US President Donald Trump would take the world into an all-out trade battle.
“The trade tensions will fade somewhat in coming months either because
Trump finally strikes some trade deals with China and possibly even with the
big EU or because markets and businesses get used to the noise,” said Holger
Schmieding at Berenberg.
“On balance, we remain cautiously optimistic that Trump will either go for
deals or at least not escalate tensions further and further throughout the
summer,” he said.
But analysts also warned that fresh retaliatory moves could trigger
another markets dive.
“Global equity bears (sellers) could transform the current rebound into a
classical dead cat bounce if trade tensions between the United States and
China continue to escalate,” predicted Lukman Otunuga, at FXTM.
European Trade Commissioner Cecilia Malmstrom said retaliatory tariffs
against US goods such as blue jeans and motorcycles would go into effect
Friday in response to US tariffs on imported aluminum and steel.
“We did not want to be in this position. However, the unilateral and
unjustified decision of the US to impose steel and aluminum tariffs on the EU
means that we are left with no other choice,” Malmstrom said in a statement
on Wednesday.
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US Commerce Secretary Wilbur Ross was grilled by US Senators over Trump’s
trade policies, with Republicans such as Utah’s Orrin Hatch and Iowa’s Chuck
Grassley balking at the risk to US industries and consumers.
“You are putting American jobs at risk, and you are destroying markets,
both foreign and domestic, for American businesses of all types, sorts and
sizes,” Hatch said.
Ross countered that in Trump’s view, the United States was already the
loser in a long-standing trade war and was only now beginning to fight back.
– OPEC focus –
Eyes are turning to OPEC’s crucial meeting as Saudi Arabia pushes, along
with non-member Russia, to ease an output ceiling that has supported oil
prices for 18 months.
The two major producers are facing stiff opposition at the June 22-23
gathering from nations that have benefited from the resulting higher
revenues.
Saudi Arabia’s energy minister Khalid al-Falih said he was convinced OPEC
members would “do the right thing” and agree to ease an oil production cap
this week despite strong resistance from arch foe Iran.
– Key figures around 2100 GMT –
New York – Dow Jones: DOWN 0.2 percent at 24,657.80 (close)
New York – S&P 500: UP 0.2 percent at 2,767.32 (close)
New York – Nasdaq: UP 0.7 percent at 7,781.52 (close)
London – FTSE 100: UP 0.3 percent at 7,627.40 (close)
Frankfurt – DAX 30: UP 0.1 percent at 12,695.16 (close)
Paris – CAC 40: DOWN 0.3 percent at 5,372.31 (close)
EURO STOXX 50: UP 0.3 percent at 3,446.15 (close)
Tokyo – Nikkei 225: UP 1.2 percent at 22,555.43 (close)
Hong Kong – Hang Seng: UP 0.8 percent at 29,696.17 (close)
Shanghai – Composite: UP 0.3 percent at 2,915.73 (close)
Euro/dollar: DOWN at $1.1581 from $1.1590 at 2100 GMT
Pound/dollar: UP at $1.3183 from $1.3174
Dollar/yen: UP at 110.37 yen from 110.06 yen
Oil – Brent Crude: DOWN 34 cents at $74.74 per barrel
Oil – West Texas Intermediate: UP $1.15 at $66.22 per barrel
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