Global stocks were mixed on Wednesday as political wrangling over Brexit heated up and investors looked for developments in the US-China trade war. Markets in Europe declined after British Prime Minister Boris Johnson asked Queen Elizabeth II to suspend Parliament, which would hamper lawmakers’ efforts to quash a no-deal Brexit at the end of October.
The British pound sank on the news, down to $1.2215 (Dh4.4) from almost $1.2300 the previous day. Shares on London’s FTSE 100, which usually rises when the pound falls due to the many multinationals listed there, declined 0.3 per cent to 7,071. Frankfurt’s DAX fell 1.2 per cent to 11,584, while France’s CAC 40 was off 1 per cent at 5,330 in midday trading.
Meanwhile, the US-China trade front continues to create uncertainty. With little to no news after President Donald Trump’s conflicting comments this week on the status of negotiations, investors are finding it difficult to put a finger as to where the ongoing US-China trade issue is headed, Jingyi Pan of IG said in a report.
Ttrade escalation between US and China had certainly grown to become the broad view. Dow and S&P 500 futures were both down about 0.2 per cent before markets opened. US and Chinese trade negotiators are due to meet next month in Washington, but neither side has given any indication of offering concessions to break a deadlock. A round of talks last month in Shanghai ended with no sign of progress.
Washington and Beijing fuelled investor pessimism on Friday with an additional round of tit-for-tat tariff hikes. Their punitive duties on billions of dollars of each other’s goods already have battered exporters on both sides and prompted forecasters to cut economic growth outlooks. There are no grounds to believe China will concede to a deal based on unilateral, lopsided demands under rising tariffs duress, Mizuho Bank said in a report.
Markets rose after Trump said Monday that Beijing was ready to talk seriously about a worsening tariff war over trade and technology following two weekend phone calls. But investors were left guessing after a Chinese foreign ministry spokesman couldn’t confirm any exchange took place. On Tuesday, US stocks declined as investors shifted money from stocks to government bonds, gold and other safe-haven assets. In Asia, the Shanghai Composite Index lost 0.3 per cent to 2,893.76 and Tokyo’s Nikkei 225 advanced 0.1 per cent to 20,479.42. Hong Kong’s Hang Seng retreated 0.2 per cent to 25,615.48.
Seoul’s Kospi rose 0.9 per cent to 1,941.09 and Sydney’s S&P-ASX 200 gained 0.4 per cent to 6,500.60. India’s Sensex shed 0.5 per cent to 37,450.81.