Global stocks edged higher on Wednesday as growth concerns and a simmering tariff dispute between Washington and Brussels were offset by bets on deeper support from global central banks.
Government bond yields fall to record lows in Europe after leaders nominated IMF Managing Director Christine Lagarde as the next ECB President with expectations to pursue more easy-money policies.
European stocks are sharply on the rise, as well as Wall Street index futures. However, the market sentiment in Asia was not so positive against the continuing negative economic data.
Asian markets recap
Most of the Asia-Pacific stock indexes ended today’s trading session mostly with declines amid the threat of Trump’s administration to impose customs tariffs on the EU imports for an additional 4 billion USD.
In China, the mainland index Shanghai Composite declined by 0.94% to 3,015.26 points, while Hong Kong’s benchmark Hang Seng dropped by 74.15 points, or 0.26%, to 28,801.41 points.
In Japan, the blue-chip index on the Tokyo Stock Exchange, Nikkei 225, fell by 116.11 points, or 0.53%, to 21,638.16 points. The best performers of the session were Nippon Suisan Kaisha (+4.04%), Fast Retailing (+2.67%) and Otsuka Holdings (+2.51%), while on the flipside were IHI Corp (-5.55%), Yaskawa Electric (-4.94%) and Tokuyama Corp (-4.78%).
South Korean index Kospi wiped out 26 points of its value, ending the day at 2,096.02 points. Samsung Electronics declined by 1.84% after analysts predicted that the company’s second-quarter earnings would fall by more than 50%. Quarterly results will be the lowest for the company in nearly three years, and the prospects for recovery are after several months, while over-supply continues, and there is a slowdown in the technology market.
In Australia, the local index S&P ASX 200 advanced by 32.30 points, or 0.49%, to 6,685.50 points. The stocks of Commonwealth Bank of Australia declined by 0.12% after Reuters announced that Australian creditors’ profits shrank as the local regulator cut interest rates on Tuesday for a second consecutive month. Westpac’s shares also wiped out 1.05% of its value while those of Australia and New Zealand Banking Group declined by 0.29%.
European stocks mid-session recap
European markets traded higher Wednesday morning after European leaders agreed on nominees to lead its main institutions for the next five years following a marathon summit. The pan-European Stoxx 600 climbed 0.8% to 392.47 points, which is its highest point since early May. The food and beverages leading gains with a 1% jump while oil and gas stocks slipped 0.6% in early trade.
German index DAX 30 edged higher by 98.68 points, or 0.79%, to 12,625.40 points at 10:00 GMT. German 10-year government bonds slid to a record low of -0.394% on Wednesday on expectations that the European Central Bank’s likely new president, Christine Lagarde, will pursue more easy-money policies. The stocks of Deutsche Bank sank by 0.7% after reports that the financial institution has held talks with Citigroup, BNP Paribas and others about a possible transfer of parts of its equities business. However, the carmakers’ stocks are on the rise with Volkswagen gaining 1.75%, while Daimler added 1%.
French index CAC 40 is up by 0.75% to 5,618.38 points at mid-session trading. The shares of carmakers Renault and Peugeot added 0.7% and 1.4%, respectively, while financial companies are mixed with Societe Generale declined by 0.45% and BNP Paribas climbed 0.64%.
British index FTSE 100 adds 0.76% to 7,616.92 points. The stocks of JD Sports rose by 3% during the morning session after the company said it was on track to meet profit expectations. The industrial and electronics distributor Electrocomponents saw its stock fall 1.2% in early deals after reporting like-for-like revenue growth of 4% in the first quarter but warning that gross margin will take a hit for the first half due to broadening of its electronics inventory. The shares of the supermarket chain Sainsbury declined by 1.7% after sales fall 1.2% in the first quarter amid weak general merchandise and clothing demand.
Wall Street pre-session recap
Wall Street stock index futures were higher Wednesday morning, as investors await a fresh batch of economic data amid concerns about global economic growth.
Around 6 a.m. ET, Dow futures indicated a positive open of more than 80 points. Futures on the S&P and Nasdaq were both seen slightly higher.
A sharp rally in global stocks following a trade truce between the two world’s two largest economies appeared to be struggling to sustain momentum on Wednesday.
The ADP payrolls data for June are expected at 8:15 a.m. ET, and weekly jobless claims and international trade data for May will both be released at 8:30 a.m. ET. The Institute for Supply Management’s non-manufacturing index and Services PMI for June and factory orders for May will follow slightly later in the session.