Most of the global markets are trading on the green on Wednesday with investors following closely the development of trade talks between China and the US.
Chinese Deputy Prime Minister Liu He arrived yesterday in the United States to talk with US officials against a backdrop of the escalating tensions between the two countries over allegations against the Chinese technology company Huawei.
On the other hand, investors are waiting for the end of the Fed’s two-day meeting. After the representatives of the US Central Bank have published their statement, a press conference will be held by the governor of the bank, Jerome Powell.
One of the main topics for financial markets is also the development on Brexit. Last night, the British MPs voted in favor of a proposal to the government to replace the Northern Ireland border protection mechanism with an alternative measure. Analysts say it strengthens the positions of Prime Minister Theresa May when she returns to Brussels to try and renegotiate the deal for Brexit – something the EU has so far excluded as an option. The purpose of this safeguard mechanism is to avoid the return of a solid border between Northern Ireland and the Republic of Ireland after the Brexit.
Asian markets recap
Most Asian indexes ended today’s trading session on the green in anticipation of the upcoming new trade talks between Chinese and US diplomats.
The blue-chip index of the Tokyo Stock Exchange, Nikkei 225, wiped out 108.10 points, or 0.52% of its value, and ended the day at 20,556.54 points.
On Chinese exchanges, the continental index Shanghai Composite reported a decline of 0.72% to 2,575.58 points, while the Hong Kong’s benchmark Hang Seng rose by 0.14% to 27,570.19 points. The shares of Chinese technology company Tencent fell by 0.29%.
The Taiwanese company Foxconn has announced it will probably abandon its screen production plans in the US due to high costs. Apple’s supplier is in a particularly inconvenient position due to continued trade tensions between Beijing and Washington.
On the other hand, Apple reported its first decline in revenue in the Christmas quarter profit for a decade and warned that the slowdown in the core iPhone business and China’s weak economic data will also be the main obstacles this year.
South Korea’s index Kospi rose by 22.84 points, or 1.05%, to 2,206.20 points. The stocks of LG Display fell by 3.66% after the company announced that its first-quarter sales are expected to fall due to weak demand.
In Australia, the local index S&P ASX 200 rose by 12.50 points, or 0.21%, to 5,886.70 points. The shares of Rio Tinto and Fortescue Metal Group rose by 4.51% and 7.75% respectively, while the stocks of BHP Billiton appreciated by 2.55%.
European markets mid-session recap
French stocks rose on Wednesday as comments from Apple’s chief that US-China trade tensions were easing helped to reduce investor anxiety about a China slowdown. Strong earnings results from LVMH also buoyed sentiment. The local index CAC 40 rose by 0.42% to 4,948.73 points at 10:30 GMT. IT consulting firm Atos soared 8.2%. The company plans to distribute 23.4% of shares in its subsidiary Worldline to shareholders.
British index FTSE 100 rose by 1.09% to 6,908.25 points at mid-session, following the depreciation of the local currency on Brexit anxiety. Miners were in demand as iron ore and copper prices rose following a mining disaster in Brazil. BHP, Anglo American, and Antofagasta all gained over 1%. British American Tobacco jumped over 3% to extend gains from the previous session as fears over the menthol cigarette crackdown Stateside receded.
German stocks fell sharply on Wednesday with DAX 30 wiping out 53.77 points, or 0.48%, to 11,165.06 points. Industrial conglomerate Siemens fell over 1% after its first-quarter net income dropped to 1.01 billion EUR from 2.19 billion EUR last year. Wirecard, a provider of electronic payment and risk management applications, declined 1.3% after unveiling its fourth-quarter results.
Wall Street pre-session recap
The futures on main Wall Street indexes point for a positive start of the trading session, as investors await new guidance from the Federal Reserve and keep an eye on the outcome of high-level trade talks between the US and China.
At 05:60 a.m. ET, Dow futures were up 76 points, indicating a slightly higher open to 87.04 points. S&P and Nasdaq futures pointed to a slightly higher open by 7.95 points and 53.71 points, respectively.
On the data front, an ADP employment report is due at 08:15 a.m. ET and a pending home sales index is due to be reported at 10.00 a.m. ET.