European stocks and US equity futures turned higher on Thursday, shrugging off losses in Asia despite a host of simmering geopolitical tensions.
Crude oil prices rebounded more than 3% Thursday morning amid reports of a tanker incident in the Gulf of Oman. This supported energy stocks.
Meanwhile, the US President Donald Trump struck a slightly more positive tone on the US-China trade war on Wednesday but again threatened to increase tariffs on Chinese goods if no deal is agreed, deeming relations between the world’s two largest economies “testy” and doing little to assuage global trade fears.
Today the markets will focus on the Eurozone finance ministers meeting in Luxembourg. On the agenda is financial penalties for Italy over its debt load, and the Eurozone budget. Later, China and the US will release industrial production and retail sales data.
Asian markets recap
Most of the main Asia-Pacific indexes ended today’s session with downturns amid continued protests in Hong Kong related to the adoption of the law on extradition to mainland China.
The Chinese index Shanghai Composite adds 0.05% to its value, ending the day at a level of 2,910.74 points. The optimism of Asian markets declined against the ongoing US-China trade war and the worsened economic performance of the strongest economy in Asia. On Wednesday it became clear that China’s inflation rate reached 2.7% YoY in May. In April, growth stood at 2.5%. Above all, food appreciation has contributed to rising prices. Producer prices in the People’s Republic grew in May by 0.6% on an annual basis, as were analysts’ expectations. In April they jumped by 0.9% compared to the previous year.
Hong Kong’s benchmark Hang Seng dropped by 197.10 points, or 0.72%, to 27,111.36 points. Twenty-two people were injured on Wednesday at the mass protests in special administrative district Hong Kong against the Bill on the extradition of people to mainland China. The authorities in Hong Kong denounced the protests as “riots”, defining them as “obviously organized”.
On the Tokyo Stock Exchange, the blue-chip index Nikkei 225 reported a decline of 97.72 points, or 0.46%, to 21,032.00 points. The shares of Apple’s supplier Japan Display collapsed by more than 7% after the company announced its restructuring plans, with the president and CEO Yoshiyuki Tsukizaki resigning.
The South Korean index Kospi fell by 0.27% to 2,103.15 points. The stock of the chip maker SK Hynix fell by over 3%.
In Australia, the local benchmark S&P ASX 200 reported a minimum decline of 0.02% to 6,542.40 points.
European markets mid-session recap
European stocks rebounded Thursday as Germany’s 5G auction drove the telecoms index higher, while a tanker incident caused oil prices to surge.
The pan-European Stoxx 600 recovered from a 0.2% fall after the bell to rise 0.16% to 380.34 points during the morning session. Telecoms stocks led gains with a 0.7% rise after Germany’s 5G auction, while oil and gas stocks also climbed 0.6%.
German index DAX 30 edged higher by 0.4% to 12,163.27 points at 08:20 GMT. The country has raised 6.55 billion EUR (7.4 billion USD) in its auction of spectrum for 5G mobile services, the Federal Network Regulator (BNetzA) said after a contest lasting nearly three months that will see a fourth operator enter the market. That fourth operator was German telecommunications provider 1&1 Drillisch, which saw its share price climb 10% in early trade as investors reacted to the news. Shares of United Internet, 1&1 Drillisch’s parent company, also rose by 8.4% during the morning session. The stocks of carmakers Volkswagen and Daimler are into the red by 0.42% and 0.32%, while chemical giant BASF sank by almost 1%. Technology and telecommunication companies are among the biggest winners today with SAP adding 1.2% and Deutsche Telekom rising by 0.74%.
French index CAC 40 is up by 0.04% to 5,377.17 points. The President Emmanuel Macron announced plans to reduce unemployment benefits for high earners and offer incentives to those working beyond normal retirement age, two major components of a reform drive resulting from months of “yellow vest” protests. The stocks of carmakers performed particularly strong with Renault adding 1.65%, while Peugeot rising by 0.87%. The shares of Airbus are also up by 0.82%.
British index FTSE 100 edged higher by 0.32% to 7,391.40 points, bolstered by Rio Tinto PLC and BHP Billiton PLC from the mining sector and BP PLC and Royal Dutch Shell from the oil sector, which are sporting gains of between 0.6% and 0.9%. The oil majors have been boosted by a surge in the oil price following reports that an oil tanker in the Sea of Oman is on fire. Meanwhile, the British copper producer Aurubis tumbled 11.2% in early deals after its CEO was dismissed amid rising project costs.
Wall Street pre-session recap
Wall Street stock index futures were slightly higher on Thursday morning. At around 04:35 a.m. ET, Dow futures indicate a positive open of more than 63 points. Futures on the S&P and Nasdaq were both into the green with the expectations of slightly positive start.
On the data front, import prices for May and the latest weekly jobless claims figures will both be released at around 8:30 a.m. ET.
Broadcom is expected to report its latest quarterly earnings results after market close.