World markets cannot find a single direction on Wednesday as the trade optimism from Asian session diminished and negative corporate earnings reports in Europe overshadowed the good news from the US economy.
Last night, the investors were encouraged by the US President Donald Trump’s “State of the Union” address. He called on Congress members to work together on the delicate topic of immigration and assured that only a wall on the southern border could guarantee US security.
He also warned that China would no longer be able to “steal the jobs and wealth of Americans”, and urged Beijing to end its “unfair trading practices”.
Donald Trump said that the new trade deal with China must include a real structural change to end unfair trade practices, reduce the chronic trade deficit and protect American jobs.
However, after analyzing more carefully the address, the markets were worried about the deepening of the Sino-American trade tensions.
Asian markets recap
Most Asian indexes ended today’s session with increases after the US President Donald Trump’s “State of the Union” address last night.
In Japan, the blue-chip index Nikkei 225 added 29.61 points, or 0.14%, to its value and ended the day at a level of 20,874.06 points. The shares of SoftBank Group Corp rose by 0.55% after the conglomerate announced it plans to redeem shares worth 5.5 billion USD. The Japanese corporation also reported a 60% increase in operating profit for the quarter, which amounted to 438.3 billion JPY (3.99 billion USD).
In South Korea, the benchmark Kospi reported a decline of 0.06% to 2,203.46 points. The stocks of Samsung Electronics rose by 0.43%, while those of SK Hynix posted an increase of 2.71%.
Australian index S&P ASX 200 rose by 0.34% to 6,026.10 points. However, the banks performed badly with shares of ANZ and Commonwealth Bank declined by 1.68% and 1.36% respectively, while those of Westpac and National Australia Bank declined by 1.24% and 1.4%, respectively.
On the Chinese markets, the index Shanghai Composite rose by 33.66 points, or 1.30%, to 2,618.18 points.
The Hong Kong’s benchmark Hang Seng added 59.47 points to its value, ending the session at 27,990.21 points.
European markets mid-session recap
German stocks drifted lower on Wednesday on the background of weak earnings results from carmaker Daimler and tensions over trade keeping investors nervous. The benchmark DAX 30 was down by almost 50 points to 11,321 points at 11:05 GMT. Energy company Uniper rallied 2% after announcing that would initiate a fresh start to redefine the future partnership with its biggest shareholder, Finland’s Fortum. Daimler lost 2% as its operating profit fell by 22% during the final three months of 2018 amid a US-China trade war and ballooning costs for developing electric and self-driving cars. The IT company Bechtle dropped by 1.3% after reporting that its fiscal 2018 earnings before taxes grew around 18% last year.
British index FTSE 100 is fluctuating near 7,177 points level on Wednesday, after rising as much as 2% during the previous day. Online supermarket Ocado slumped 6.3% after a huge fire swept through a robotic warehouse in Hampshire. Housebuilder Redrow rallied nearly 2% as it reported record half-year earnings despite Brexit uncertainty. Similarly, Barratt Developments jumped 3.3% after reporting strong first-half results.
French stocks were moving lower on Wednesday. The benchmark CAC 40 was down 8 points to 5,074.62 points after climbing 1.7% the previous day. Automakers Renault and Peugeot dropped around half a percent on tariff worries. BNP Paribas fell 1.8% after the lender cut its profit and revenue growth targets for 2020 after a tough fourth quarter. Software firm Dassault Systemes soared over 7% after its quarterly revenue topped forecasts. The construction giant Vinci edged down slightly despite posting solid results for full-year 2018.
Wall Street pre-session recap
Wall Street stock index futures traded lower in the premarket Wednesday morning after President Donald Trump delivered his second State of the Union address.
At around 06:30 a.m. ET, Dow futures indicated a negative open of more than 60 points. Futures for both the S&P 500 and the Nasdaq were also trading lower, indicating a negative start of 7.70 points and 23.27 points.
The Federal Reserve’s Jerome Powell is scheduled to speak in Washington, on Wednesday evening. The US central bank chairman is expected to deliver opening remarks and answer questions on monetary policy at a town hall meeting with teachers.