Global stocks posted gentle gains on Wednesday despite disappointing sales data from US retailers on Tuesday and as trade tensions between the US and China, which continued to overhang market activity.
The trade remains in the focus of the markets. Last night, the Chinese Ambassador to Washington Cui Tiankai confirmed that Beijing is ready to resume trade talks with Washington. The top US business lobby in China said nearly half its members are seeing non-tariff barrier retaliation in China due to the trade war.
Some of the world’s biggest footwear firms are urging Donald Trump to end the US trade war with China, warning of a “catastrophic” effect on consumers. A letter signed by 173 companies, including Nike and Adidas, says the president’s decision to raise import tariffs will affect the working class. They also warn that higher levies threaten the future of some businesses.
Asian markets recap
Asian markets ended mixed on Wednesday as trade tensions continued to linger between the US and China.
The shares in mainland China edged down on the day, with the Shanghai composite declining 0.49% to 2,891.70 and the Shenzhen component lower by 0.51% to 9,041.22. The Shenzhen Composite fell 0.506% to 1,540.85. The shares of Chinese surveillance tech company Hikvision dropped by 5.54% after the New York Times reported that the US administration is pondering restrictions on the company’s ability to buy American technology.
Meanwhile, Hong Kong’s index Hang Seng rose by about 0.2%, as of its final hour of trading.
Japan stocks were higher after the close on Wednesday, as gains in the Communication, Rubber and Banking sectors led shares higher. At the close in Tokyo, the Nikkei 225 gained 0.05% to 21,283.37 points. Japanese exports shrank for the fifth consecutive month in April due to a decline in supplies of chip equipment to China. The data highlight the growing danger for the world’s third-largest economy from the trade war between Washington and Beijing. The Ministry of Finance data released today shows a decline in exports by 2.4% in April compared to the same month of the previous year. This is a drop for the fifth consecutive month and is higher than expected by analysts 1.8%. In March, exports also dropped by 2.4%. The best-performing stocks during the session on the Nikkei 225 were Mitsui Engineering & Shipbuilding (+3.52%), Tokyu Fudosan (+3.34%) and Taiyo Yuden Co (+3.19%), while on the flip side were Suzuki Motor Corp (-5.52%), NKSJ Holdings (-4.0%) and Toho Co (3.78%).
In South Korea, the Kospi recovered from its earlier slip to close 0.18% higher at 2,064.86 points, as industry heavyweight Samsung Electronics’ stock rose 0.81%.
In Australia, the index S&P ASX 200 added 0.16% to close at 6,510.70 points, being supported by the news that the Reserve Bank of Australia is contemplating a decrease in key interest rates over the next month to support the local economy. Meanwhile, the re-elected government should take part in lowering income tax and stimulating spending, reports Reuters. The cut in interest rates will be the first since August 2016, when the bank lowered interest rates to a record low – 1.50%.
European markets mid-session recap
European stocks edged higher on Wednesday after started the day into the correction zone. With European elections looming later this week, and Britain’s Brexit crisis threatening to engulf its enfeebled Prime Minister, risk appetite was already in short supply in the overnight session. However, the Eurozone consumer confidence picked up to a seven-month high in May, indicating that decent consumption growth is likely to continue in the second quarter
German index DAX 30 inched higher by 0.37% to 12,188.86 points at 10:00 GMT. The stocks of carmakers are trading with a minimum decline, as well as the financial shares. However, the software giant SAP is among the big winners gaining almost 1% after Goldman Sachs Group raised price target for the company’s stocks. The stocks of the chemical giant BASF are also slightly up, adding 0.2%, amid prospects for growth of the global biodegradable packaging materials market following the ban of plastics imposed by the EU.
French index CAC 40 is up by 0.15% to 5,393.49 points at mid-session trading. The stocks of the carmakers Peugeot and Renault are down by 0.6% each, while Airbus wiped out 0.3% from its market cap.
British index FTSE 100 climbed 0.58% to 7,371.75 points at 10:00 GMT. Internationally-exposed companies British American Tobacco, Unilever and Diageo were among the biggest support to the blue-chip index. Blue-chip housebuilders including Persimmon and Barratt, which gained in the last session when Theresa May unveiled her new Brexit deal, gave up more than 2%. However, British Steel has collapsed into administration after failing to agree a 30 million GBP rescue package from the UK government, putting around 5,000 jobs at risk.
Wall Street pre-session recap
The US stock index futures stalled on Wednesday morning, as market participants continue to monitor an intensifying trade war between the world’s two largest economies.
At around 6:45 a.m. ET, Dow futures indicated a negative open of 2 points. Futures on the S&P and Nasdaq were both also flat, indicating minimum declines at open.
In corporate news, Lowe’s, Target, and Canadian Imperial Bank are among some of the companies expected to release their latest quarterly results before the opening bell.
Copart, L Brands, and Synopsys are all set to report their latest figures after market close.