European stocks climbed on Monday and were mixed in Asia as investors mulled three weeks of declines amid escalating US-China trade tensions. The investors are looking for signs of stabilization after trade frictions and mixed economic data put global stocks on course for their first monthly decline of 2019.
The Euro consolidated last week’s gains after mainstream European Union parties held their ground against populists in elections.
The main topic in the focus of the investors is the results of the elections for the European Parliament held on Sunday.
The European People’s Party (EPP) and the Alliance of Socialists and Democrats in Europe remain the first and second political forces in the next European Parliament, although they lose their majority amid the strong performance of the Eurosceptics and populists. Significant growth is marked by Liberals and Greens, which become respectively third and fourth political forces.
On Sunday, the highest turnout for a European Parliament since 1979 has been noted. The EPP wins 179 seats while the Socialist Party (PES) gets 152. The third power in the European Parliament is the Alliance of Liberals and Democrats for Europe (ALDE), which, thanks to the Republic, ahead of French President Emmanuel Macron, managed to win 105 seats. In the UK, Nigel Farage’s Brexit Party succeeded in defeating Conservatives and Labor. Farrage wins 32% of the vote and will have 29 seats in the EP out of a total of 73 British MEPs.
At the same time, US President Donald Trump is on a visit to Japan, saying Tokyo has a “substantial advantage” against Washington for “many, many years”. Donald Trump arrived in Japan on Saturday to a largely ceremonial visit to demonstrate strong ties with the country in spite of the rising trade strain.
The US head of state said that Tokyo and Washington are approaching a deal that focuses on the US trade deficit. The US registered a deficit of 56.8 billion USD in goods and services with Japan in 2018.
Days before his visit to Tokyo, Trump threatened to impose duties on imports of cars from the European Union and Japan.
The markets in the US are closed today due to Memorial Day.
Asian markets recap
The main stock indexes of the Asia-Pacific region ended the first trading session of the week mixed amid the ending vote for the European Parliament and the ongoing visit by US President Donald Trump in Japan.
Tokyo’s blue-chip index Nikkei 225 advanced by 65.36 points, or 0.31%, to 21,182.58 points. The shares of Nissan Motor Co and Mitsubishi Motors Corp were trading at 0.97% and 0.21%, respectively, after it became clear that Italian-American carmaker Fiat Chrysler had made an official offer to merge with the French manufacturer Renault SA. Toyota and Honda also rose by 0.92% and 0.63%, respectively.
In China, the mainland index Shanghai Composite posted a 39.76 point rise, or 1.39%, to 2,892.76 points. In Hong Kong, the index Hang Seng dropped by 0.09% to 27,328.53 points.
The South Korean benchmark Kospi dropped from 0.05% to 2,044.21 points.
Australian index S&P ASX 200 wiped out 0.06% of its value, closing the session at 6,451.90 points.
European markets mid-session recap
The Euro Stoxx 50 advanced, helped by Fiat Chrysler’s 19% surge after the company proposed merging with Renault, which jumped 17%.
German index DAX 30 inched higher by 63.5 points, or 0.53%, to 12,074.55 points at 08:30 GMT. Germany’s 10-year yield declined less than one basis point to -0.12%, the lowest in almost three years. The stocks of carmakers Volkswagen and Daimler rose by 0.7% each. The shares of BASF and Bayer are also on the rise, adding 0.65% and 0.58%, respectively. The financial companies are the biggest gainers today with Deutsche Bank adding 1.6%.
French index CAC 40 is up by 0.43% to 5,339.16 points at mid-session trading. France’s 10-year yield dipped less than one basis point to 0.278%, the lowest in more than two years. The stocks of Renault are up by 14%, following the Fiat Chrysler’s merger offer. However, the shares of Peugeot are down by 2.8%. The stocks of Societe Generale and BNP Paribas are higher, gaining 1.4% and 0.9%, respectively.