28.9 C
New York
Sunday, July 3, 2022

Stock markets run out of steam on caution over N.Korea summit

Stock markets run out of steam on caution over N.Korea summit

LONDON: US and European stocks markets faltered Tuesday as initial optimism faded over US President Donald Trump’s historic summit with North Korean leader Kim Jong Un, dealers said.

Frankfurt, London and Paris had shot higher at the opening bell, following gains across Asia, but then ran out of steam.

Wall Street also turned lower after a slightly stronger start.

“The general reaction in the markets has been fairly muted,” OANDA analyst Craig Erlam told AFP.

“While the outcome of the summit is generally positive and gives reason for optimism, there may also be an element of scepticism from investors in regards to what denuclearisation means, the timescale and whether the deal will be sustained.”

As enthusiasm petered out, traders looked ahead to key policy meetings of the Federal Reserve and European Central Bank later this week.

“European equities are mixed amid divergent economic news in the region and focus shifting to the upcoming central bank meetings,” analysts at Charles Schwab said.

Investors also remain concerned about a possible global trade war after the weekend’s G7 gathering in Canada ended with Trump withdrawing support for a joint communique and accusing host Prime Minister Justin Trudeau of being dishonest.

That came just after he had hit Canada, Mexico and the European Union with steel and aluminium tariffs, sparking threats of retaliation that some fear could escalate.

In London, political uncertainty also weighed on stocks as British Prime Minister Theresa May faces a potentially divisive parliamentary vote on her centrepiece Brexit legislation.

– Oil recovers –

Official data meanwhile showed that Britain’s unemployment rate held in April at 4.2 percent, the lowest level since 1975.

Separately, traders are keenly awaiting this week’s Fed and ECB policy meetings. The US central bank is expected to lift interest rates Wednesday but its post-meeting statement will be closely watched for a clue about its plans for future hikes.

On Thursday, ECB officials will likely debate for the first time cutting back on their crisis-era stimulus programme.

Oil prices meanwhile reversed an earlier lower trend, seen after OPEC said that the oil cartel’s production rose slightly in May, to trade higher as speculation about a forthcoming oil producer meeting intensified.

OPEC and its partners meet in Vienna next week to decide on a possible extension of a production cut deal — which crucially includes giant producer Russia — that has been key to the oil price recovery.

The oil market is on high alert ahead of the June 22 meeting, sector analysts reported, saying there were signs that Saudi Arabia and Russia would push for higher production ceilings at the meeting.

– Key figures around 1540 GMT –

London – FTSE 100: DOWN 0.4 percent at 7,703.81 points (close)

Paris – CAC 40: DOWN 0.4 percent at 5,453.37 (close)

Frankfurt – DAX 30: FLAT at 12,842.30 (close)

EURO STOXX 50: DOWN 0.2 percent at 3,474.94

New York – Dow Jones: DOWN 0.1 percent at 25,309.28

Tokyo – Nikkei 225: UP 0.3 percent at 22,878.35 (close)

Hong Kong – Hang Seng: UP 0.1 percent at 31,103.06 (close)

Shanghai – Composite: UP 0.9 percent at 3,079.80 (close)

Euro/dollar: DOWN at $1.1783 from $1.1784 at 2100 GMT

Pound/dollar: DOWN at $1.3358 from $1.3379

Dollar/yen: UP at 110.24 yen from 110.03 yen

Oil – Brent Crude: UP 10 cents at $76.56 per barrel

Oil – West Texas Intermediate: UP 35 cents at $66.45

Copyright AFP (Agence France-Press), 2018

Source: Brecorder

Related Articles

Stay Connected

- Advertisement -

Latest Articles

Popular Articles