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STOCKS-EUROPE-MARKETS
Stocks retreat on trade worries, Italy budget concerns
LONDON, Oct 3, 2018 (BSS/AFP) – Stock markets mostly slid Tuesday as
traders refocused on lingering global trade disputes and worries about
Italy’s budgetary spending.
The euro unravelled against the dollar, while oil prices were steady after
a recent surge.
“Renewed fears about the US-China trade dispute and the state of Italian
politics has shaken European equity markets,” noted David Madden, market
analyst at CMC Markets UK.
“Now that the US has wrapped up its North American trade deal, it can
focus on readdressing the trading imbalance with China.”
Wall Street had a lacklustre opening, with the Dow gaining just a few
points from Monday’s close.
Earlier in Asia, Hong Kong ended sharply lower, with investors there
playing catch up after a long weekend.
Going against the grain Tuesday, Tokyo’s benchmark Nikkei index rose for a
third straight session to a fresh 27-year high on a cheap yen and advances on
Wall Street.
In Europe, “stock markets and the single currency are trading in the
red… with Italian fiscal concerns continuing to weigh on the region”, said
Craig Erlam, senior market analyst at Oanda.
“Investors have become increasingly concerned about the coalition
government’s spending plans, with the deficit under the proposals being
larger than many had expected and leaving Italy on a collision course with
Brussels.”
Eurozone finance ministers on Monday warned Italy to abide by EU rules on
public spending, just days after Rome announced a big spending boost in
defiance of Brussels.
Elsewhere Tuesday, oil was little changed after a blistering rally.
Crude has motored in recent weeks on concerns about supplies after
sanctions are imposed on Iran next month, while OPEC’s decision not to ramp
up output, upheaval in Venezuela, a strong dollar and a drop in oil rigs have
also pushed prices higher.
Both main contracts jumped almost three percent Monday, with observers and
key players in the sector now eyeing $100 a barrel for Brent.
“The market’s very keen to figure out the size of the impact from the
Iranian supply disruptions and whether Saudi Arabia and Russia are able to
make up for the losses,” said Kim Kwangrae, a commodities analyst at Samsung
Futures.
“At the same time, the US-Mexico-Canada Agreement is also improving the
overall sentiment on oil.”
New York traders sent the Dow and S&P 500 shares indices higher Monday
after the United States-Mexico-Canada Agreement (USMCA) was announced Sunday
to replace the North American Free Trade Agreement.
The deal drew an end to months of uncertainty after US President Donald
Trump had threatened to tear up the decades-old NAFTA.
BSS/AFP/HR/0940