LONDON: Global stock markets faltered Wednesday as China-US trade tensions simmered ahead of the introduction of new tariffs.
European equities diverged, with Frankfurt and London falling but Paris rising, after a downbeat session in Asia.
Sentiment was subdued with Wall Street shut for the Independence Day holiday.
“European markets have struggled… hit by further China worries,” noted analyst Chris Beauchamp at trading firm IG.
“Without US markets in the frame today European and UK investors are setting themselves up for a relatively uninspiring session.
“This will doubtless suit many in the UK, who are probably nursing hangovers after last night,” Beauchamp added in reference to England’s football win over Colombia at the 2018 World Cup tournament in Russia.
In Asia, Shanghai stocks twisted lower before US President Donald Trump’s new tariffs kick in on Friday.
The US is due to begin enforcing tariffs on more than $30 billion (25.8 billion euros) in Chinese imports as retribution for what Washington describes as Beijing’s theft of American technology and other unfair trade practices.
Beijing has vowed to respond with its own tariffs immediately, which Trump has said will invite far steeper US counter-measures, potentially covering another $400 billion in Chinese goods.
“There remain worries about the impact of a possible US-China trade war on both the Chinese economy with potential fall out across the wider Asian region,” said City Index analyst Fiona Cincotta.
US authorities have meanwhile blocked a seven-year application from China Mobile to enter the domestic market, citing national security concerns.
However, in a positive development, Washington has temporarily allowed Chinese telecoms company ZTE to resume some activities.
– China concern –
Concerns remain for the Shanghai stock market, which is down more than 20 percent from its January high on concerns about a slowing Chinese economy.
The yuan is also under pressure, though it levelled after a rally on comments from central bank chief Yi Gang, who pledged to keep the exchange rate stable and avoid using the currency as a weapon in any trade war.
Oil prices diverged, after earlier climbing on the prospect of tumbling Iranian crude exports in the face of new US sanctions.
Saudi Arabia has said it is prepared to boost supply to balance the market, but traders are also weighing factors like Libyan supply disruption and rising UD demand.
– Key figures around 1100 GMT –
London – FTSE 100: DOWN 0.2 percent at 7,575.64 points
Frankfurt – DAX 30: DOWN 0.1 percent at 12,338.57
Paris – CAC 40: UP 0.3 percent at 5,331.31
EURO STOXX 50: UP 0.3 percent at 3,415.70
Tokyo – Nikkei 225: DOWN 0.3 percent at 21,717.04 (close)
Shanghai – Composite: DOWN 1 percent at 2,759.13 (close)
Hong Kong – Hang Seng: DOWN 1.1 percent at 28,241.67 (close)
New York – Dow: UP 0.2 percent at 24,307.18 (close)
Euro/dollar: DOWN at $1.1632 from $1.1642 at 2100 GMT
Pound/dollar: UP at $1.3213 from $1.3143
Dollar/yen: UP at 110.48 yen from 110.86 yen
Oil – Brent Crude: UP four cents at $77.80 per barrel
Oil – West Texas Intermediate: DOWN 47 cents at $73.67 per barrel
Source: Brecorder
