Nissan dragged down Nikkei index and Asian markets - Finance and Markets

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The global markets are moving down since the beginning of the week, as red wave spread from Europe to the US and finally hit the Asian stocks.

Among the news dictating the markets during the last hours was the arrest of the CEO of Nissan. Carlos Ghosn, who is the chairman of Nissan, Renault and Mitsubishi Motors, was detained Monday by Japanese authorities after an internal investigation at Nissan revealed “significant acts of misconduct”.

Tension around Brexit talks is also on the focus of the markets, which are expecting some positive news from Brussels, where British Prime Minister Theresa May has several meetings with the EU officials. The threat for Hard Brexit is getting bigger and markets are afraid from the chaos, which it may cause.

The markets are also cautious for the forthcoming G20 meeting, which is expected to ease trade tension between the US and Chine. The US President Donald Trump will meet with Chinese leader Xi Jinping to discuss trade relations between the two countries. However, there are still concerns in the markets for the possible imposition of additional duties to re-escalate tensions between Washington and Beijing.

According to the Econpol Europe research network, the US economy is already seeing the positive effect of customs duties on Chinese imports, with total benefits amounting to 18.4 billion USD. The US tariffs hit about 50% of Chinese imports. According to the study, customs duties are likely to increase US consumer prices by 4.5% for the imports concerned goods. In addition, exports of these goods to the US will shrink by 37%. This will reduce America’s trade deficit with China by 17%. Meanwhile, the analysts project an increase in tariffs revenues by 22.5 billion USD.

Asia markets recap

Asian stock exchanges ended the session in red, as Carlos Ghosn was detained Monday by Japanese authorities after an internal investigation at Nissan revealed “significant acts of misconduct”. The prosecutors said Carlos Ghosn and other Board member Greg Kelly are allegedly collaborated to under-report Ghosn’s income by about 5 billion JPY (44 million USD) over a five-year period ending in March 2015. The maximum punishment in Japan for filing a false financial statement is up to 10 years in prison and a fine of up to 10 million JPY (89,000 USD).

Following the announcement of Carlos Ghosn’s detention, Nissan announced that intend to remove him from the position of chairman of the board of directors.

On this backdrop, the Japanese index Nikkei 225 ended the session with a fall of 238.04 points, or 1.09%, to 21,583.12 points. The shares of Nissan Motor Co declined by 5.45% at the end of the session.

Nikkei 225

The South Korean index Kospi declined by 0.86%, ending the session at level of 2,082.58 points.

On the Chinese markets, Shanghai Composite recorded a decline of 2.13%, or 57.66 points, to 2,645.85 points, while Hong Kong’s Hang Seng fell by 531.66 points (-2.02%) to 25 840.34 points.

In Australia, the S&P ASX 200 index wiped out 0.38% of its value, closing the session at 5,671.80 points.

European markets mid-session recap

European indexes are moving on red in the mid-session, being affected by the bad performance in the US and Asia.

The German stocks fell sharply on Tuesday to extend losses from the previous session as global growth worries persisted and investors watched the latest developments on Brexit. The benchmark DAX 30 depreciated by 110 points, or 0.98%, to 11,133 points in opening deals. The chemicals giant BASF wiped out 2.5% of its market cap, after warning for reorganization, which will affect about 20,000 employees worldwide directly or indirectly. The payments firm Wirecard lost 5.5% after it forecast core earnings to be between 740 and 800 million EUR for 2019. According to the analysts DAX will continue bearish trends for fifth consecutive session.

The UK index FTSE 100 drops below 7,000 mark again with overnight falls in Asia and Wall Street combined with a mild dose of the Brexit jitters pushing the market gently lower. The FTSE 100 was down 0.5% to 6,966.02 points at 11:30 GMT, on track for its third straight daily loss, with sentiment also knocked by heavy losses in the euro zone after a report Apple has cut production triggered a global rout in tech stocks.

FTSE 100 index

French stocks fell sharply on Tuesday to extend the previous session’s slide as global growth worries as well as concerns about slackening demand in the technology sector sapped investors’ appetite for risk. The index CAC 40 dropped by 0.83% to 4,944.09 points at 12:00 GMT.

Wall Street markets per-trading futures

The US stock index futures pointed to a lower open on Tuesday morning as tremors in tech stocks keep investors nervous.

At around 04:00 a.m. ET, Dow futures were down by 150 points, pointing to triple-digit losses of 131.44 at the open. The futures on S&P 500 and Nasdaq pointed to a negative open too, dropping by 17.50 points and 76.00 points, respectively.

Today, aside from the last list of finance reports, the investors will be watching for the US Housing Starts numbers, followed by Philly Fed non-manufacturing data at the same time.