Global stocks are trading without a single direction in cautious trade on Tuesday after China pledged to use prudent monetary policy and the US Secretary of State Mike Pompeo said that trade talks with China aimed at ending tariffs on hundreds of billions of dollars worth of products will be successful.
After cutting its economic growth target for 2019, China said its fiscal policy would become “more forceful”, with planned cuts of nearly 2 trillion CNY (298.31 billion USD) in taxes and fees for companies.
Meanwhile, the EU’s chief Brexit negotiator Michel Barnier and Britain’s negotiating team will hold more Brexit talks today amid the prospect of a chaotic, economically damaging departure from the bloc.
Asian markets recap
The main stock indexes of the Asia-Pacific region ended today’s trading session without a single direction amid the decrease in Chinese economic growth forecast for 2019 from 6.8% to 6.0-6.5%.
The index Shanghai Composite added 26.67 points, or 0.88%, to its value, ending the day at 3054.25 points. Hong Kong’s benchmark Hang Seng recorded a minimum gain of 0.01% to 28,961.60 points.
China provides a number of measures to support economic activity. Inflation is expected to reach about 3%, and the budget deficit is 2.8% of the gross domestic product (GDP). However, the economic forecast of the country for 2019 was lowered from 6.8% to 6.0-6.5%. The combination of local incentives and a trade deal with Washington over the next few weeks can boost the Chinese economy.
In Japan, the blue-chip index on the Tokyo Stock Exchange, Nikkei 225, declined by 0.44% to 21,726.28 points, and shares of the SoftBank Group fell by 1.78%.
The South Korean index Kospi wiped out 0.52% of its value, ending at 2,179.23 points. the stocks of the microprocessor manufacturer SK Hynix declined by 0.57%.
In Australia, the local index S&P ASX 200 declined by 18.10 points, or 0.29%, to 6,199.30 points. Earlier today, the Reserve Bank of Australia announced it retained its optimistic outlook on the economy after deciding to keep its key interest rates at a record low just one day before GDP figures are expected to show that growth over the last quarter has slowed to almost zero. The bank ended its 30th meeting with a 1.5% interest rate level and signaled a robust monetary policy outlook as it expects higher economic growth and inflation this year.
European markets mid-session recap
German index DAX 30 is trading with decrease of 0.11% to 11,580.19 points at 11:15 GMT. Automakers were flat to slightly lower after data showed China’s services sector expanded at the slowest pace in four months in February. Chemical company Evonik jumped 5% after it signed an agreement to sell its Methacrylates business to private equity company Advent International for 3 billion EUR.
French index CAC 40 is down by 0.15% to 5,278.88 points in mid-session. Euronext was little changed as US-based Nasdaq Inc increased its offer to buy Norwegian stock exchange operator Oslo Bors. Eurofins Scientific slumped 7% after saying it would reduce its investment in mergers and acquisitions in the coming years. Total SA gained half a percent after it inked a pact with Russia’s Novatek to buy 10% of the Arctic LNG 2 project. Automakers Renault and Peugeot were trading mixed after data showed China’s services sector expanded at the slowest pace in four months in February.
Britain’s FTSE 100 edged higher on Tuesday as Vodafone gained after saying it would raise funds through a bond issue and investors turned to defensive stocks, while Intertek slipped as investors booked in profits after in-line results. The index FTSE 100 is up by 17.66 points, or 0.25%, to 7,151.69 points. Vodafone led the main bourse higher, adding 2.4% after saying it intends to raise about four billion euros by issuing mandatory convertible bonds. Shares in the world’s second-largest mobile operator were on track for their best day since late November.
Wall Street pre-session recap
Wall Street stock index futures were marginally higher Tuesday morning with market players still focused on U.S.-China trade developments.
At around 06:40 a.m. ET, Dow futures rose 34 points, indicating a positive open of just 31 points. Futures on the S&P and Nasdaq both pointed to a narrowly higher open.
There will be services PMIs at 9.45 a.m. ET; new home sales at 10 a.m. ET and federal budget figures released at 2 p.m. ET.