Global stocks are volatile on Tuesday, amid continuing tensions between the US and Iran and the approaching G20 summit, where Donald Trump will meet with Chinese leader Xi Jinping in an attempt to resolve the year-long trade war. European and Asian stocks weakened slightly ahead of G-20 summit, which gave a strong impetus to gold prices, which rallied and government bond yields slipped.
On Tuesday, the Deputy Prime Minister Liu He had a telephone conversation with US Secretary of State Steven Mnuchin and permanent trade representative Robert Lighthizer. The main topic of the conversation was the trade issues, and the parties agreed to continue with the discussion.
At the same time, the tensions between the US and Iran continue. On Monday, Donald Trump imposed new sanctions against Iran, while saying he was open to talks with the authorities in the country. A specific target of the new sanctions is Iran’s supreme leader, Ayatollah Ali Khamenei.
Internationally exposed stocks fell as traders sold-off the dollar and bet on more dovish signals from Fed Chairman Jerome Powell, while uncertainty over how trade talks would pan out at the G20 summit hit shares of HSBC and other Asia-focussed banks.
Asian markets recap
The main stock indexes of the Asia-Pacific region ended today’s trading session with declines after US President Donald Trump signed a decree on Monday imposing new, heavier sanctions against Tehran. On the other hand, investors are already looking forward to the upcoming meeting between Donald Trump and Chinese President Xi Jinping at the end of the week, which may be the most significant part of the G20 meeting in Japan. A possible agreement between the US and China will put an end to the continuing trade war between the two largest economies in the world.
In China, the mainland index Shanghai Composite fell by 26.07 points, or 0.87%, to 2,982.07 points. Hong Kong’s benchmark Hang Seng wiped out 337.68 points, or 1.18% of its value, ending the day at 28,175.32 points. Poor performance was reported by companies in the Chinese financial sector. Shares of Bank of Communications and China Construction Bank declined by 3.02% and 1.34% on the Shanghai stock exchange and by 3.87% and 1.37% on the Hong Kong Stock Exchange.
The blue-chip index of the Tokyo Stock Exchange, Nikkei 225, reported a drop of 92.18 points, or 0.43%, to 21,193.81 points. Nissan Motor and Toyota Motor fell by 0.29% and 0.03%, respectively. During the annual meeting of Nissan’s management in Yokohama, shareholders approved a new management structure built in a way to strengthen control and prevent the concentration of corporate power in the hands of a person after the company was shaken by the end of 2018 by the arrest of his former head, Carlos Ghosn. Nissan shareholders have approved the creation of three commissions. Renault’s Chief Executive Officer, Thierry Bollorе, will be appointed as a member of the scrutineering committee, and Jean-Dominique Senard, the chairman of the French concern, will be assigned to the appointment committee, which will be supervised by leading independent director, Masakazu Toyoda.
In South Korea, the local index Kospi fell by 0.22% to 2,121.64 points. The central bank said this year’s inflation would likely fall short of its forecast, which was already set far below its medium-term target, on weak consumption at home and a slowing global economy. Most large-cap shares finished in negative terrain, with pharmaceuticals and tech stocks leading the losses. Samsung Electronics gained 0.22 %, but the chipmaker SK Hynix lost 0.3%. LG Electronics shed 1.23%, while its display-making affiliate LG Display dived 1.4%.
In Australia, the index S&P ASX 200 registered a decline of 0.11% to 6,658 points.
European markets mid-session recap
European stocks are trading with slight declines on Tuesday amid continuing tensions between the US and Iran and hope for resolution of Sino-American trade war at G20 summit in Japan.
The pan-European Stoxx 600 declined by 0.15% to 383.27 points.
German index DAX 30 inched lower by 13.83 points, or 0.11%, to 12,260.74 points at 10:10 GMT. The stocks of Daimler continue its negative performance from yesterday, wiping out 0.6%. However, the shares of chemical giant BASF and technology leader SAP are up by 0.7% and 0.4%, respectively.
French index CAC 40 is down by 8.69 points, or 0.16%, to 5,513.02 points at mid-session trading. French manufacturing sector sentiment soured this month as business leaders became less optimistic about activity in the sector. Figures from statistic agency Insee’s monthly survey on Tuesday showed that manufacturing sentiment declined to 102 in June from May’s six-month high of 104. The consensus in the poll had projected a flat reading. June’s figure was the lowest since November 2016. The consultancy Capgemini on Monday announced an agreement to buy engineering and digital services company Altran for 3.6 billion EUR (4.10 billion USD) to tap into the fast-growing engineering outsourcing services market. Altran shares soared 22% higher, while Capgemini’s stock traded around 7% higher. Meanwhile, the French telecoms provider Iliad fell 3.9% after Berenberg downgraded the company’s stock from “buy” to “hold”.
British blue-chip index FTSE 100 is down by 15.90 points, or 0.21%, to 7,400.79 points. Sales at British supermarket chains fell during the 12 weeks to June 16, losing further ground to discounters Aldi and Lidl, industry data showed. Tesco and Morrisons, which fell in the previous session after a downbeat consumer spending forecast, lost 2% each.
Wall Street pre-session recap
Wall Street stock index futures were lower Tuesday morning, amid expectations of more dovish talk from the Federal Reserve.
At around 06:20 a.m. ET, Dow futures slipped 34 points, indicating a positive open of more than 8 points. Futures on the S&P and Nasdaq were both seen slightly lower.
Market focus is largely attuned to the US central bank, with no less than five Fed policymakers, including Chair Jerome Powell, scheduled to speak on Tuesday.
New home sales for May for May will be released at around 10:00 a.m. ET, with consumer confidence figures, Richmond Fed survey data and Dallas Fed services for June set to follow slightly later in the session.