Home Stocks Asian, European Stocks Follow US Lower

Asian, European Stocks Follow US Lower

7 min read
0
174

Stock markets in Europe and Asia edged down Wednesday, as spats between the U.S. and China related to trade and technology firms continued to dampen investor mood.

The Stoxx Europe 600 fell 0.1% in early European trade, with tech firms leading the losses with a 0.7% drop.

In Asia, Hong Kong’s Hang Seng was down 1.1% and the Shanghai Composite shed 1%. Japan’s Nikkei Stock Average closed down 0.3%.

U.S. markets will be closed Wednesday for the July 4 Independence Day holiday.

In the final hour of trading Tuesday, U.S. stocks were dragged lower by a fall in technology stocks, after a Chinese court temporarily banned U.S. firm

Micron Technology
Inc.

from selling chips in the country.

This came only one day after the U.S. moved to block

China Mobile
Ltd.

—the world’s biggest mobile operator in subscribers—from entering the U.S. market, citing national security concerns.

Shares in Micron closed down 5.5% Tuesday. China Mobile edged up 0.2% Wednesday, after hitting a four-year low the previous day.

The tussle over tech firms is only part of the continuing tensions between the U.S. and China, which has sparked concerns about a broader trade war among money managers. A first round of U.S. tariffs imposed on Chinese goods is set to come into effect Friday.

So far, Asian and European stock markets have been the hardest-hit by the U.S. administration’s move toward greater protectionism. This adds to signs that the pace of economic growth may have already peaked outside the U.S., leading investors to push further back the time at which they expect other central banks to follow the Federal Reserve’s path and start tightening monetary policy.

The continuing tensions between the U.S. and China have sparked concerns about a broader trade war among money managers.


Photo:

nicky loh/Reuters

Bond yields in the eurozone have been heading lower since the European Central Bank signaled interest rates will remain unchanged at least through the summer of next year.

Yields on 10-year German government bonds traded at 0.298% Wednesday, little changed from Tuesday’s 0.293%, which was the lowest since late May.

Central-bank policy and concerns about trade are also spilling over into the currency market, analysts say.

The WSJ Dollar Index, which tracks the U.S. dollar against a basket of currencies, was down 0.2% Wednesday, but is up 2.4% in 2018 as a whole, despite some weakness earlier in the year.

“What matters for the exchange rate is how pronounced the difference of these will be between the economies of the eurozone compared with the U.S.” Thu

Lan Nguyen,

analyst at German lender

Commerzbank
AG

, told clients in a research note. “Sentiment amongst companies in the eurozone has deteriorated notably in view of the risk of a trade war with the U.S. Companies in the U.S. on the other hand seem more optimistic.”

The Chinese yuan rose 0.6% against the dollar in the offshore market, reversing earlier weakness on the back of pledges by the People’s Bank of China to shore up the currency if necessary.

Oil prices edged higher Wednesday with Brent futures, the global benchmark, rising 0.3% to $78 a barrel.

Write to Jon Sindreu at jon.sindreu@wsj.com

Let’s block ads! (Why?)


Source link

Leave a Reply

Your email address will not be published. Required fields are marked *

Check Also

GM, UAW to announce 'major' investment in Orion Assembly Plant – Detroit Free Press

Jamie L. LaReau Detroit Free Press Published 9:35 AM EDT Mar 22, 2019 General Motors and t…