The optimism on the world markets evaporated and the stocks returned to negative trend. The uncertainty around global trade tensions affected the traders, who are afraid that inverted yield curves in the credit markets could be ominous signs for world growth.
Asian stocks turned deep in red, while European markets opened with decreases and keep the negative trend.
Asian markets recap
Asian markets returned to red against uncertainties about the future of US-China trade relations.
The Japanese blue-chip index Nikkei 225 dropped by 2.39% to 22,036.05 points, while the smaller Topix wiped out 2.36% to 1,649.20 points. The shares of car maker Nissan fell by 1.18% after Reuters announced that the company’s external board will meet today to discuss the replacement of the arrested former president, Carlos Ghosn, who is likely to be detained again. Leading the scant upside were camera-house Konica Minolta, up 0.8%, followed by packaging-maker Toyo Seikan, up 0.8%, and then Chiyoda, up 0.3%. On the downside were shipper Kawasaki Kisen Kaisha, off 10.0%, and then engineering-house Showa Denko, off 8.8%.
Meanwhile, in South Korea, the index Kospi declined by 0.82% to 2,114.35 points.
The Hong Kong’s index Hang Seng wiped out 0.22% of its value in the last trading session. The continental Chinese markets, however, did not follow the negative trend in the region. The index Shanghai Composite rose slightly by 0.42% to 2,665.96 points, while the smaller Shenzhen Composite advanced by 0.43% and finished the trade at a level of about 1,387.49 points.
In Australia, the main S&P ASX 200 index decreased by 1.01%, closing at 5,713.10 points, with most sectors being on red. The financial sub-index fell by 1.22%. The shares of the four biggest banks recorded serious losses. Australia and New Zealand Banking Group declined by 1.35% and Westpac wiped out 1.37%. The stocks of National Australia Bank dropped by 0.93% and Commonwealth Bank of Australia decreased by 1.05%.
The Australian Central Bank earlier announced that it maintains its benchmark interest rate unchanged at 1.50%. The Central Bank Governor Philip Lowe told that the low interest rates continue to support Australia’s economy.
European markets mid-session recap
European markets are trading on red after the growing uncertainty around global trade tensions, Brexit and Italian budget. The bearish sentiment had settled on all European stock exchanges.
The British stocks surrendered early gains and drifted lower as investors wait to see how the Brexit debate in parliament will pan out. The index FTSE 100 fell by 0.23%, or 37.54 points, to 7,024.87 points at 11:00 GMT, tracking losses in global stocks as investors’ optimism on a deal between US President Donald Trump and Chinese President Xi Jinping to delay tariffs evaporated. The mining stocks Antofagasta, Glencore, Anglo American, were among the biggest weights on the FTSE 100, falling by 1.7-2.6% as copper prices eased back on doubts over how fragile a trade truce struck at the G20 on Saturday was.
German stocks fell modestly on Tuesday as confused signals over US-China trade talks prompted traders to unlock some profits after the previous session’s strong rally. Italy continued to be in focus after the country’s Prime Minister Giuseppe Conte said the revised budget would be ready in the coming hours. In mid-session, the index DAX 30 decreased by 65.82 points, or 0.57%, to 11,399.64 points.
French stocks fell on Tuesday, as the focus returned to Italy after the country’s Prime Minister Giuseppe Conte said the revised budget would be ready in the coming hours. Elsewhere, a senior EU law officer said the U.K. could halt Brexit by unilaterally revoking Article 50. The index CAC 40 dropped by 23.91 points, or 0.47%, to 5,030.07 points at 11:00 GMT. Falling US yields on expectations of a slower pace of rate hikes by the Federal Reserve pulled down financials, with banks BNP Paribas, Credit Agricole, and Societe Generale wiping out around 1%. JCDecaux slumped by 4.3% after a brokerage downgrade.
Wall Street pre-session recap
Stock futures pointed to a negative open on Tuesday amid questions over whether the US-China trade agreement will resolve the two countries’ dispute in the long term.
At around 6:00 a.m. ET, Dow Jones Industrial Average futures were trading with a decrease of 157 points, implying a negative open of -153 points. S&P 500 and Nasdaq futures were also in the red, with expected opening at -10.42 points and -44.38 points respectively.
During the trading session, the markets will expect the Redbook sales figures are due at 8:55 a.m. ET. Meanwhile, New York Federal Reserve President John Williams is due to give a speech on tightness in the labor market at 10 a.m. ET.