The world markets started the week with decreases amid the uncertainties about the upcoming new US-China trade talks.
A key topic in the focus of investors is the forthcoming meeting later this week between the US and Chinese representatives, who will continue the talks to settle the trade dispute between the two world’ largest economies.
China’s Deputy Prime Minister Lie He is scheduled to visit Washington, with investors carefully following every important decision that will be made during the talks.
Important topic during the week will be the Brexit deal. The next key debate in the House of Commons is scheduled for Tuesday following the historic defeat of Prime Minister Theresa May’s deal in the Commons earlier this month.
Meanwhile, the profits of Chinese industrial companies shrank for a second straight month in December, a government report showed today, adding to the pressure on policymakers to support growth. Manufacturing companies’ profits declined an annual 1.9% last month as both factory inflation and economic growth slowed amid a protracted US-Sino trade war.
Markets will also closely monitor another key event scheduled for this week, the two-day Federal Open Market Committee (FOMC) meeting, which is expected to keep the interest rates unchanged, but may hint for the further monetary policy.
On Friday, the US President Donald Trump and Congress leaders managed to reach an agreement to resume work for the federal government for three weeks, ending its longest paralysis in US history. High Representative of the Democratic Party has specified that funding for a wall along the border with Mexico is not included in the deal.
Asian markets recap
The main stock indices of the Asia-Pacific region ended the first session of the week with declines amid uncertainties about the upcoming new US-China trade talks.
On the Chinese markets, the continental index Shanghai Composite was 0.18% of the value and ended the day at 2,596.98 points. Hong Kong’s index Hang Seng Index declined by 0.06% to 27,551.39 points. The shares of the technology company Tencent fell by 0.5%.
In Japan, the blue-chip index Nikkei 225 fell by 124.56 points, or 0.60%, to 20,649.00 points. The shares of the Softbank Group wiped out 1.17% of their value.
In South Korea, the index Kospi declined by 0.02% to 2,177.30 points, with shares of SK Hynix and LG Electronics declining by 3.75% and 2.59% respectively, while the value of Samsung SDI shares declined with 0.22%. Local investors followed developments around the deal between Saudi oil giant Saudi Aramco and Hyundai Oilbank Co. The state-owned Arab company plans to buy a 20% stake in the South Korean company, whose main shareholder is currently Hyundai Industries Holdings Co. Saudi Aramco aims to strengthen its customer base and market share in Asia as it moves to possibly the largest initial public offering (IPO) in the world history. At the beginning of February, the two companies are expected to hold meetings of the board of directors to vote on the deal.
The Australian Stock Exchange was closed today due to local holidays.
European markets mid-session recap
German stocks were moving lower on Monday as investors braced for an eventful week. The index DAX 30 is down by 0.16% to 11,263.97 points at 10:45 GMT, compensating the strong loses at the beginning of the trading session. Siemens slid half a percent after media reports suggest that the German conglomerate and France’s Alstom have made new concessions to the EU Commission regarding the planned merger of their rail activities. MorphoSys AG slumped 5.4% after a US court declared some patents invalid.
The UK stocks are also down with index FTSE 100 wiping out 0.16% to 6,798.44 points at 10:45 GMT. Legacy software giant Micro Focus PLC was 23.5p lower at 1,469.5p after Goldman Sachs downgraded the stock to “neutral” from “buy”. Flybe Group PLC was the top performer, up more than a third, as major shareholder Hosking stepped up its efforts to derail the takeover by a consortium led by Virgin Atlantic.
French stocks edged lower on Monday as downbeat China data rekindled growth worries and caution set in ahead of key economic releases and events this week. The benchmark CAC 40 index was down by 0.42% to 4,905.32 points at mid-session on Monday. Alstom shares fell by 2.3%.
Wall Street pre-session recap
The US stock index futures pointed to a lower open on Monday as investors weighed the prospect of another government shutdown. As of 6:10 a.m. ET, Dow futures indicated a drop of more than 100 points, indicating a negative start of -107.20 points. S&P 500 and Nasdaq futures were also in the red.