Global stock markets colored in red on Thursday as global growth worries resurfaced and investors waited to see whether the European Central Bank would extend its liquidity operations to the region’s banks.
The investors’ focus was on the lawsuit filed by the Chinese telecommunications company Huawei Technologies against the US government, as well as the US trade deficit.
Data out on Wednesday showed that the US trade deficit remains a problem. President Donald Trump has imposed a series of tariffs on countries like China, in an attempt to bring down his country’s trade deficit. However, Wednesday’s data showed that the trade deficit in the US hit a 10-year high in December.
Asian markets recap
Most of the indexes in the Asia-Pacific ended today’s trading session with declines after Chinese telecommunications company Huawei Technologies filed a lawsuit against the US government.
On the Chinese markets, the continental index Shanghai Composite added 0.14% to its value, ending the day at 3,106.42 points. At the same time, the Hong Kong’s benchmark Hang Seng dropped by 258.15 points to 28,779.45 points with Alibaba Group falling by 0.45%.
Huawei Technologies, a China-based telecommunications maker, filed a lawsuit against the US government, stating that the law restricting its US business is contrary to the constitution.
This signals a more aggressive response from the company to US prosecutors trying to persuade other countries to block Huawei’s fifth-generation communications networks. The case also marks another confrontation between China and the United States, which spent much of 2018 in the imposition of customs duties worth billions of dollars.
Investors from China also appreciated the Italian decision to join Beijing’s Belt and Road Initiative. Italy may become the first country of the G-7, which will join China’s plan for the New Silk Road.
On the Tokyo Stock Exchange, the blue-chip index Nikkei 225 fell by 140.80 points, or 0.65%, ending the session at 21,456.01 points. The shares of industrial automaker Fanuc fell by 2.80%, while Renesas Electronics lost 14.6% of its value after the company announced its plans to stop chip production in the next two months due to slowing growth demand in China.
In South Korea, the index Kospi posted a decline of 0.45% to 2,165.79 points with Samsung Electronics shares rose by 1.02%.
Australian index S&P ASX 200 rose by 0.29% to 6,263.90 points, helped by the good results of companies in most sectors. The stocks of Australia and New Zealand Banking Group and Commonwealth Bank of Australia declined by 0.11% and 0.09% respectively, while those of Westpac and National Australia Bank grew by 0.33% and 0.82%, respectively.
European markets mid-session recap
German index DAX 30 is trading with a decrease of 67 points, or 0.59%, to 11,520.17 points at 11:00 GMT. Automakers BMW, Daimler, and Volkswagen fell by 1-2% as investors awaited more clarity on US-China trade talks. The banks Commerzbank and Deutsche Bank also moved lower in anticipation of the ECB loan scheme. Dialog Semiconductor lost 2.7% of its market value after it agreed to acquire Silicon Motion Technology’s Mobile Communications product line, branded as FCI, for 45 million USD. Deutsche Post dropped by 1% as its fourth-quarter consolidated net profit after non-controlling interests decreased by 2.9% from last year. Merck KGaA fell over 1% after reporting a fall in adjusted fourth-quarter core earnings. Media holding company Axel Springer slumped nearly 7% after the company forecast 2019 revenue growth in the low- to mid-single digit percentage range.
French benchmark CAC 40 was down by 0.49% to 5,263.12 points at mid-session trading on Thursday. Automakers Renault and Peugeot tumbled around 2.5% as investors awaited more clarity on the US-China trade talks. Banks BNP Paribas, Credit Agricole, and Societe Generale were down between 0.2% and 0.8% in anticipation of the ECB loan scheme. Advertising company JC Decaux rallied 3.8% after reporting a rise in 2018 profit and lifting dividend.
Britain’s FTSE 100 dipped after rising for four days as several blue-chip stocks traded ex-dividend, while NMC Health plus insurers Aviva and Admiral slipped after earnings reports, but Melrose gained after its adjusted profit nearly tripled. The index fell by 0.49% to 7,160.71 points at 11:00 GMT. United Arab Emirates’ healthcare provider NMC Health slipped 6.4% on course for its worst day since July 2016 after posting annual results.
Wall Street pre-session recap
Wall Street stock index futures were lower Thursday morning as market players remain focused on U.S.-China relations.
At 6:15 a.m. ET, Dow futures indicated a negative open of around 80 points. Futures on the S&P and Nasdaq also pointed to a lower open by
On the economic front, there will be jobless claims due at 8.30 a.m. ET, and consumer credit numbers released at 3 p.m. ET.