World shares mixed after Trump calls halt to stimulus talks

AP – World shares were mixed yesterday after United States (US) President Donald Trump ordered a stop to talks on another round of aid for the economy.

Markets rose in Paris and Hong Kong but fell in London and Tokyo.

Hours after his tweets about ending the stimulus talks, Trump appeared to edge back a bit, calling on Congress to send him a “Stand Alone Bill for Stimulus Checks (USD1,200)”.

Trump’s announcement via Twitter that he was suspending the talks until after the election came after Federal Reserve Chair Jerome Powell urged Congress to come through with more aid, saying that too little support “would lead to a weak recovery, creating unnecessary hardship”.

Some analysts characterised Trump’s move as likely a negotiating ploy.

“I do not believe hopes of a stimulus deal are now gone forever,” Jeffrey Halley of Oanda said in a commentary. “One of Trump’s favourite negotiating tactics, judging by past actions, is to walk away from the negotiating table abruptly. The intention being to frighten the other side into concessions.”

People walk under screens showing the KOSPI, Korea Composite Stock Price Index, at the Korea Exchange in Seoul. PHOTO: AP

Britain’s FTSE slipped 0.2 per cent to 5,940.69. In Germany, the DAX edged 0.1 per cent lower to 12,848.61. The CAC 40 in Paris gained 0.1 per cent to 4,848.72. The future contract for the S&P 500 gained 0.5 per cent while the future for the Dow industrials picked up 0.6 per cent.

With Chinese markets closed for a weeklong holiday, trading in Asia has been subdued.

Hong Kong’s Hang Seng rose 1.1 per cent to 24,242.86 and the Kospi in South Korea surged 0.9 per cent to 2,386.94. Japan’s Nikkei 225 slipped 0.1 per cent to 23,422.82.

Australia’s S&P/ASX 200 jumped 1.3 per cent to 6,036.40, as investors were cheered by the government’s proposed budget plan, which included tax cuts, subsidies and other stimulus to counter the impact of the pandemic. India’s Sensex gained 0.7 per cent to 39,846.18.

On Tuesday, the S&P 500 index slid 1.4 per cent after gaining 0.7 per cent before the President’s announcement, which he made on Twitter about an hour before the close of trading.

In a series of tweets, Trump said, “I have instructed my representatives to stop negotiating until after the election when, immediately after I win, we will pass a major stimulus bill that focusses on hardworking Americans and small business.” He also accused Speaker Nancy Pelosi of not negotiating in good faith.

Optimism that Democrats and Republicans would reach a deal on more stimulus ahead of the November 3 elections had helped lift the stock market recently.