Global stocks fall on Thursday amid political and trade tensions. The session in Asia ended into the red, which was followed by European equities. The futures on Wall Street indexes also point for the negative start of the session. The disappointing economic data and worries over a protracted US-China trade dispute added to a gloomy outlook for global growth caused serious deterioration of the markets’ sentiment.
Investors continue to monitor developments around Washington-Beijing trade talks. On Wednesday, US Treasury Secretary Steven Mnuchin expressed hope that the negotiations on a bilateral trade agreement with China will continue. Earlier, he said that he is not planning to visit China for a new round of bilateral trade talks.
Over the last two weeks, the trade war has again threatened the growth of the world economy after the US increased its duties on Chinese imports with annual turnover 200 billion USD from 10% to 25%, while Beijing responded with duties on US imports worth 60 billion USD.
In Europe, the growth in business activity in the Eurozone accelerated slightly this month, but not as expected, slowed by the strong contraction in the industrial sector. Last month, European Central Bank (ECB) President Mario Draghi hinted at the possibility of giving more support to the troubled Eurozone economy if its hold-up stalled, and Thursday’s data would likely increase bankers’ concerns. The preliminary data for PMI, which is considered a good indicator of the state of the economy, marks a minimal increase to 51.6 points this month from 51.5 points, which is below the average forecast of investors for 51.7 points.
Asian markets recap
The main stock indexes of the Asia-Pacific region ended today’s trading session into the red, as investors continue to look with concern at the ongoing trade tensions between the US and China.
In China, the mainland index Shanghai Composite fell by 39.19 points, or 1.36%, to 2,852.52 points. The Hong Kong’s benchmark Hang Seng reported a decline of 531.64 points, or 1.92%, to 27,174.30 points.
In Japan, the blue-chip index on Tokyo Stock Exchange, Nikkei 225, wiped out 132.23 points, or 0.62%, ending the day at 21,151.14 points. Shares of SoftBank Group fell by more than 5% after Reuters announced that the US Justice Department had suggested blocking of the deal between T-Mobile and Sprint.
Australian index S&P ASX 200 declined by 0.29% to 6,491.80 points.
In South Korea, Kospi dropped by 0.26% to 2,059.59 points.
Due to the ban imposed by the US administration on Chinese technology giant Huawei, several companies reported a fall in their stock price.
In Taiwan, the stocks of the local companies Foxconn and Taiwan Semiconductor declined by more than 3%.
In Hong Kong, the shares of the smartphones camera manufacturer Sunny Optical cameras fell by more than 6%.
European markets mid-session recap
Europe’s major stock markets fell in initial trading Thursday after losses elsewhere, as voting kicked off in European Parliament elections. Investor sentiment remains dogged by frictions over the festering China-US trade war. Auto stocks led the losses, down by nearly 3%.
German index DAX 30 fell by 207 points, or 1.7%, to 11,961.22 points at 11:00 GMT. The household spending in Germany has grown at the fastest rate in the last eight years in the first quarter of 2019, while growth in construction activity and surprisingly strong exports have also helped Europe’s largest economy stabilize. The carmaker Daimler is the biggest loser during the session with its stocks falling by 7%, despite announcing a cost review. The shares of Deutsche Bank fell by 2.2% after the shareholders have gathered Thursday for its annual meeting with questions over the bank’s strategy and leadership.
French stocks CAC 40 is down by 1.61% to 5,292.41 points at mid-session trading. The stocks of Renault and Peugeot fell by 1.6% each, while Airbus is down by 1.4%. Financial and banking stocks were also into the red with Societe Generale and BNP Paribas falling by up to 1%.
British stocks sank deep into the red on Thursday amid uncertainty on Brexit. The blue-chip index FTSE 100 fell by 95 points, or 1.3%, to 7,239.27 points. The stocks of United Utilities Group PLC fell by 2.4% after reporting disappointing results.
Wall Street pre-session recap
Wall Street stock index futures were sharply lower Thursday as U.S.-China trade worries persisted with more companies suspending business with Chinese telecom giant Huawei.
Dow Jones Industrial Average futures dropped 210 points, indicating a loss of 208 points at the open. S&P 500 futures fell 24 points while Nasdaq 100 futures declined 85 points.
Shares of Qualcomm and Xilinx fell more than 2% in the premarket while Micron and Lam Research declined 1.9% and 1.7%, respectively.
Meanwhile, investors are likely to monitor a flurry of economic data reports on Thursday. The latest weekly jobless claims data are set to be published at around 8:30 a.m. ET, followed by a flash reading of manufacturing and services PMI figures for May.
New home sales for April and Kansas City Fed survey data for May are both scheduled for release later in the session.