Global stocks stabilized on Thursday and inched higher after Wall Street eked out a gain following volatility fueled by concern about possible fallout from the US-Chinese trade war.
Markets in London and Frankfurt advanced in early trading. Shanghai, Tokyo and Hong Kong also gained, recovering some of their losses after three days of anxiety over the Chinese yuan’s decline. Investors are monitoring the yuan, after China’s central bank set the official reference rate for the Chinese currency at 7.0039 yuan per dollar on Thursday.
Investors were rattled Wednesday by a wave of interest rate cuts by Reserve Banks of India, Thailand and New Zealand. That added to rate cuts since May in Australia, South Korea, and the Philippines in response to fear Sino-American trade tension will dent global economic growth.
Asian markets recap
The main stock indexes in Asia-Pacific continue to stabilize. Particularly in China, stock prices have risen significantly, although trade with the US continues to shrink in July because of a customs dispute between the two countries.
The Chinese mainland blue-chip index CSI 300, which includes China’s 300 top stocks, rose by 1.37% to 3,671.16 points after a weak performance during the previous session. Shanghai Composite added 25.87 points, or 0.93%, to 2,794.55 points, while Shenzhen Composite gained 1.19% to 8,919.28 points. The indices were supported by the surprisingly strong recovery in China’s foreign trade over the past month despite conflict with the US. Chinese exports unexpectedly returned to growth in July despite the escalating trade conflict between Washington and Beijing. However, the recovery may be short-lived as the US prepares to impose new duties. The sharp fall in the yuan this week will only offer little relief to Chinese exporters amid new US tariffs and weakening global demand. Exports rose unexpectedly, and the decline in imports was not as strong as analysts feared.
Hong Kong’s index Hang Seng rose by 0.71% to 26,182.15 points. Shares of Cathay Pacific Airways Limited was down 1% after the carrier said ticket sales fell as fewer people took Cathay flights into Hong Kong in July amid mass demonstrations against a controversial extradition bill and government policies.
In Japan, the blue-chip index on Tokyo Stock Exchange, Nikkei 225, closed up by 0.37% to 20,593.35 points. The Topix index, on the other hand, bucked the overall trend and slipped fractionally to finish at 1,498.66 points.
South Korean index Kospi closed up by 0.57% to 1,920.61 points,
In Australia, the local index S&P ASX 200 added 0.75% to 6,568.10 points.
European markets mid-session recap
European stocks traded higher Thursday morning as investors swing back toward risk assets and digest a range of corporate earnings. The pan-European Stoxx 600 jumped 0.8% in early trade to 371.67 points, with technology stocks climbing 1.4% as all sectors and major bourses traded in positive territory.
German index DAX 30 edged higher by 79.60 points, or 0.68%, to 11,729.75 points at 09:30 GMT. The stocks of the submarines-to-elevators giant Thyssenkrupp added 3%, despite that company posted a net loss of 94 million EUR (105.37 million USD) for the quarter and posted its fourth profit warning under current boss Guido Kerkhoff. The shares of the sportswear giant Adidas declined by 1.5% after the company posted a second-quarter net profit of 531 million EUR and backed its 2019 guidance, but reported disappointing second-quarter sales. Deutsche Telekom is down by 0.8% after reporting an increase of 7.1% for core profits, in line with expectations. The lighting company Osram fell by 6.15% after one of its top investors, Allianz Global Investors, rejected a takeover bid.
French index CAC 40 is up by 1.05% to 5,321.87 points. The stocks of carmakers are performing strongly during today’s trading with Renault gaining 1.43% and Peugeot adding 1.44%.
British index FTSE 100 returned to growth after the initial fall, inching higher by 0.13% to 7,207.91 points. The telecommunications provider BT saw its stock fall 6.2% after HSBC cut its price target. The stocks of insurer Aviva PLC rose 0.9% after upping its interim dividend by 3% to 9.5p per share following a strong first-half performance from its general insurance arm which more than offset weakness in its fund management division.
Wall Street pre-session recap
The futures of the Wall Street indexes are into the green today, indicating a slightly positive start of the trading session. As of 06:00 a.m. ET, the futures of Dow Jones are up by 67 points, indicating a positive open by more than 52 points. S&P 500 and Nasdaq Composite are also slightly up.
A sharp decline in bond yields stabilized late on Wednesday’s session to temper concerns over slowing economic growth. This prevented the main Wall Street indexes from collapse during yesterday’s trading session.