Global stocks edged higher on Wednesday ahead of a Brexit summit and a policy meeting of the European Central Bank, but the gains were limited by the gloomy IMF forecast for the world economic growth.
Brexit extension until the end of the year or until March 2020, was shaping up to be most likely, according to the EU diplomats, as they prepare for Wednesday evening’s summit with British Prime Minister Theresa May.
A key topic in the focus of investors was the news of the International Monetary Fund’s global economic growth prospects. According to the IMF, the world economy will grow by 3.3% this year. For comparison, in January the fund expected global growth to reach 3.5%. The rate of increase in 2019 will be the worst since 2009. The IMF lowered its forecast for the third time in the last six months.
World trade in goods and services will increase by 3.4% this year, slowing down from 3.8% in 2018. The IMF forecast for January was a 4% growth.
Asian markets recap
The main Asian stock exchanges closed today’s trading session without a single direction on the background of the International Monetary Fund’s (IMF) forecast for world economic growth in 2019.
In China, the mainland index Shanghai Composite added 0.61% to 3,259.39 points, while Hong Kong’s benchmark Hang Seng reported a decline of 0.09% to 3,031.08 points. The shares of China Mobile and the CNOOC, fell by 0.76% and 0.27% respectively.
On the Tokyo Stock Exchange, the local blue-chip index Nikkei 225 declined by 115.02 points, or 0.53%, to 21,687.57 points. Fanuc’s stock declined by 0.6%, while those of Toyota fell by 0.15%.
The South Korean index Kospi advanced by 0.52% to 2,225.02 points. The shares of chipmaker SK Hynix rose by 0.4%, while those of Posco declined by 1.86%. SK Innovation, another company in the SK group, declined by 0.81% against the background of the news for the talks with Volkswagen AG, the German carmaker, to set up a joint venture to produce electric vehicle batteries.
In Australia, the local index S&P ASX 200 rose by 0.03% to 6,223.50 points after the deputy governor of the Reserve bank of Australia, Guy Debelle, said the regulator was trying to find the most appropriate path to its monetary policy against the background “Contradictory signals” from the labor market, gross domestic product data and business surveys. The stocks of BHP Billiton and Westpac declined by 1.08% and 0.70% respectively.
European markets mid-session recap
German index DAX 30 inched higher by 51.6 points, or 0.45%, to 11,902.20 points at 12:00 GMT. The stocks of the automakers Volkswagen and Daimler are down by 0.5% and 0.4%, while the shares of chemical giant BASF rose by 0.6%. Among the winners during today’s trading are also software company SAP, industrial giant Siemens and investment banking group Deutsche Bank, which are up by 1.2%, 0.7% and 0.75%, respectively.
French index CAC 40 is trading with an increase of 0.4% to 5,458.13 points at mid-session. However, the stocks of Airbus edged lower due to the ongoing threat from the US of imposing tariffs on EU imports, including aircraft components. The trade issues also weight on the stocks of automakers with Peugeot moving down by 0.15%, while Renault is trading with a decrease of 0.25%.
British blue-chip index FTSE 100 is up by 0.06% to 7,429.94 points at 12:00 GMT. The stocks of Tesco rose by 1.7% after the company posted better-than-expected full-year operating profit, cementing the recovery of Britain’s biggest supermarket. Dunelm Group Plc added more than 3% to its market capitalization as the homewares retailer said it expected to top analysts forecasts for full-year profit after surging online demand helped it ride out a tough British retail environment in the latest quarterly report. Shares of ASOS climbed after the British online fashion retailer stuck to its full-year guidance for sales, profit margins, and capital expenditure despite a plunge in first-half pretax profit. British engine maker Rolls-Royce dipped after agreeing for inspection of some Trent 1000 TEN engines earlier than previously planned after the recent re-emergence of issues related to blade deterioration.
Wall Street pre-session recap
Wall Street stock index futures were higher Wednesday morning, as market participants await inflation data and minutes from the Federal Reserve’s latest meeting.
At around 7:10 a.m. ET, Dow futures indicated a positive open of more than 70 points. Futures on the S&P and Nasdaq were both seen slightly higher, indicating positive open by 8 and 18 points, respectively.
The Labor Department is expected to publish month-on-month and year-on-year Consumer Price Index figures for March at around 8:30 a.m. ET.