Global Stocks Sink Tuesday 12/10 05:50
Global stock markets fell Tuesday as investors looked ahead to a U.S. tariff
deadline on Chinese imports and American and European interest rate decisions.
BEIJING (AP) -- Global stock markets fell Tuesday as investors looked ahead
to a U.S. tariff deadline on Chinese imports and American and European interest
Markets also were watching for the outcome of Britain's snap election
Thursday amid uncertainty over plans to leave the European Union.
Benchmarks in London and Frankfurt declined in early trading. Tokyo and Hong
Kong declined while Shanghai closed higher after spending most of the day in
Washington is due to impose new tariff hikes Sunday on $160 billion of
Chinese goods in a fight over Beijing's technology ambitions and trade surplus.
Investors expect President Donald Trump to put off or scrap the increase but
talks on an interim "Phase 1" agreement announced in October have failed to
agree on details.
"All hell could break loose if the tariffs don't get postponed," said
Stephen Innes of AxiTrader in a report. That would tell investors "they have
yet again been taken down the trade talk garden path only to end up at the
cliff edge of trade war purgatory."
Chinese spokespeople have appealed for a prompt resolution to the fight that
threatens to chill global economic growth. Trump rattled markets last week by
saying he might be willing to wait until after next year's presidential
London's FTSE 100 opened 0.6% lower at 7,191.95 and Germany's DAX lost 0.7%
to 13,007.19. France's CAC 40 declined 0.5% to 5,808.63.
On Wall Street, futures for the Standard & Poor's 500 index and the Dow
Jones Industrial Average were down less than 0.4%.
In Asia, the Shanghai Composite Index ended up 0.1% at 2,917.32. Tokyo's
Nikkei 225 was off less than 0.1% at 23,410.19 and Hong Kong's Hang Seng
declined 0.2% to 26,436.62.
Seoul's Kospi rose 0.4% to 2,098.00 and Sydney's S&P-ASX 200 lost 0.3% to
6,706.90. India's Sensex opened down 0.5% at 40,270.11. Taiwan and Singapore
declined while New Zealand advanced.
Wall Street closed lower, snapping a three-day winning streak for the
benchmark S&P 500 index.
Losses for technology, health care and financial companies outweighed gains
elsewhere in the market.
The S&P 500 lost 0.3% and the Dow fell 0.4%. The Nasdaq dropped 0.4%.
Forecasters expect little change from the U.S. Federal Reserve when its
latest policy meeting ends Wednesday.
The U.S. central bank has cut its benchmark lending rate three times this
year as what Chairman Jerome Powell called insurance against the economic drags
from the tariff battle with Beijing and slower global growth.
A meeting of the European Central Bank on Thursday also is expected to
produce no surprises. Forecasters expect the bank to affirm commitment to its
dovish bias amid warnings about European economic weakness and risk to growth.
British leaders are looking to Thursday's election for 650 seats in the
House of Commons to break an impasse over departure from the EU and London's
future relationship with the trade bloc.
Prime Minister Boris Johnson pushed for a vote more than two years early in
hopes of winning a majority. He has promised to take Britain out of the EU by
Jan. 31 is his Conservatives win.
The opposition Labour Party is promising to renegotiate the divorce deal,
then give voters the choice in a referendum of leaving the EU on those terms or
remaining in the bloc.
CHINA INFLATION: Chinese consumer inflation spiked to a seven-year high of
4.5% due to shortages of pork that pushed up food costs. The price of pork rose
110.2% over a year earlier. An outbreak of African swine fever has disrupted
supplies by prompting farmers and Chinese authorities to quarantine, destroy or
slaughter early millions of pigs. Forecasters noted the peak of the outbreak
appeared to be passing and pork prices rose only 3.8% compared with the
ENERGY: Benchmark U.S. crude lost 7 cents to $58.95 per barrel in electronic
trading on the New York Mercantile Exchange. The contract declined 18 cents on
Monday to close at $59.02. Brent crude, used to price international oils, shed
3 cents to $64.22 per barrel in London. It lost 14 cents the previous session
CURRENCY: The dollar gained to 108.59 yen from Monday's 108.55 yen. The euro
advanced to $1.1070 from $1.1064.