Global stocks edged lower on the first trading session of June, as the mounting trade fears continue to keep the markets under pressure.
During the Asian trading session, most of the indexes were trading with declines as only South Korean indexes Kospi ending into the green. Even the positive data of the Chinese industrial PMI, which exceeded analysts expectations, failed to improve the investors’ moods.
The markets feel additional pressure after US President Donald Trump announced on Thursday that the US would impose a 5% duty on all Mexican imports from June 10 to stop illegal migration across the southern border. This is happening amid the ongoing trade dispute between Washington and Beijing.
After the volatile May for markets, it is unlikely that the beginning of June will give some relief, as the imposition of more US duties raises fears that car manufacturers will not be the next to be attacked by Washington.
Asian markets recap
Asian stock exchanges were mixed on Monday amid mounting concerns about global trade.
In China, the mainland index Shanghai Composite fell by 0.3%, while the Shenzhen Component wiped out 0.74% of its value. The Shenzhen Composite index also moved to red territory with just over 1%. Meanwhile, Hong Kong’s benchmark Hang Seng reported a decline of 0.15%. The stocks of HSBC fell by 1.01%, while the life insurance company AIA declined by 1.56%. A private survey of the Chinese manufacturing sector shows that production activity is slightly better than expected in May. The industrial Purchasing Managers’ Index (PMI) of the Caixin/Markit reached 50.2 points last month. For comparison, analysts surveyed by Reuters expected the indicator to be at a level of 50 points, while in April it was at a level of 50.2 points. Last week, the official industrial PMI rose to 49.4 points, which was below analysts’ forecast for 49.9 points.
In Japan, the blue-chip index Nikkei 225 was down by 0.92% and Topix dropped by 0.88%.
In South Korea, the benchmark Kospi rose by 1.28% after shares of Samsung Electronics and chipmaker SK Hynix rose by 3.06% and 1.99%, respectively.
In Australia, the local index S&P ASX 200 declined by 1.19%, with almost all sectors finishing the trading session into the red zone.
European markets mid-session recap
European stocks traded lower on Monday morning, as fears over the current state of global trade intensified, causing international markets to stumble.
German index DAX 30 is down by 0.12% to 11,712.46 points at 10:00 GMT. The state of European politics remains in focus after news emerged over the weekend that Andrea Nahles would resign as leader of Germany’s Social Democrats (SPD) party. The markets continue to analyze and assess further political news, as after the early collapse took the uptrend and compensates some of the loses. The shares of German semiconductor manufacturer Infineon Technologies fell by 5.7% after it announced a deal to acquire US-based Cypress Semiconductor Corporation. The strongest performer in early trade was German digital payments company Wirecard, which saw its stock climb 3.2% after its CEO Markus Braun tweeted that the company was “steering towards an outstanding first half year of 2019”. The car makers are mixed with the stocks of Volkswagen adding 0.1%, while Daimler declining by 0.9%.
The French index CAC 40 is down by 0.17% to 5,198.51 points at mid-session trading. The shares of Renault are up by 0.7%, while Peugeot is down by 1.2%. The stocks of financial companies edged lower with Societe Generale and BNP Paribas declining by 0.7% each.
London’s main stock market index fell to a near three-month low on Monday as an exchange of trade threats between Washington and Beijing stoked fears of a slide into recession as economic data from Asia again disappointed. The blue-chip index FTSE 100 was trading down by 0.24% to 7,144,28 points after earlier reached its lowest level since March 8. Sectors that are more vulnerable to a disruption in international trade were hit, with 1% falls for oil majors Shell and BP leading losses among blue-chip shares.
Wall Street pre-session recap
Wall Street stock index futures were sharply lower Monday morning, as market participants monitor an intensifying trade dispute between the world’s two largest economies.
At around 05:50 a.m. ET, Dow futures slipped 96 points, indicating a negative open of more than 98 points. Futures on the S&P and Nasdaq were both seen slightly lower.
The markets will expect the final reading of manufacturing PMI (Purchasing Managers’ Index) data for May will be released at around 9:45 a.m. ET. The Institute for Supply Management (ISM) manufacturing index for May, construction spending figures for April and latest light vehicle sales data will all follow slightly later in the session.