Global stocks mixed after Wall Street record on trade truce

BEIJING (AP) — Global stock markets were mixed yesterday after Wall Street’s benchmark hit a new high following the latest truce in the costly United States (US)-Chinese trade war.

London and Tokyo rose, while Germany declined and Shanghai was unchanged. Hong Kong advanced despite protests over a proposed extradition law that led to police using tear gas to clear streets.

Investors were encouraged by the agreement between Presidents Donald Trump and Xi Jinping of China at a weekend meeting of the Group of 20 major economies to resume trade negotiations. Forecasters warned, however, the two sides still face the same differences that caused talks to break down in May.

Also on Monday, the Trump administration ratcheted up tensions with the European Union (EU) by proposing additional tariffs on USD4 billion of European imports in a dispute over subsidies to aircraft manufacturers.

Investors “may find this optimism cooling,” Jingyi Pan of IG said in a report. “The sustainability of this upward movement remains in question with the uncertainty continuing for geopolitical tensions.”

In early trading, London’s FTSE 100 rose 0.2 per cent to 7,514.62. Germany’s DAX lost 0.1 per cent to 12,506.06 and France’s CAC 40 was off three points at 5,565.08.

On Wall Street, the future for the benchmark Standard & Poor’s 500 index was down 0.1 per cent and that for the Dow Jones Industrial Average was off 0.2 per cent.

In Asia, Tokyo’s Nikkei 225 gained 0.1 per cent to 21,754.27. Hong Kong’s Hang Seng added 1.2 per cent to 28,875.56 after the latest bout of political protests was quelled with relatively little violence. Sydney’s S&P-ASX 200 added five points to 6,653.20.

A man walks by an electronic stock board of a securities firm in Tokyo. – AP

The Shanghai Composite Index was off one point at 3,043.94 and Seoul’s Kospi shed 0.4 per cent to 2,122.02.

India’s Sensex was up 0.2 per cent at 39,776.06. New Zealand and the Philippines advanced, while Taiwan and Singapore declined.

On Monday, the S&P 500 rose 0.8 per cent after Trump’s agreement to hold off imposing new tariffs on USD300 billion of Chinese imports put investors in a buying mood.

Investors worry the fight over Beijing’s technology ambitions will drag on global economic growth. Those concerns prompted the Federal Reserve last month to declare its willingness to cut interest rates if the dispute hurts the US economy.

The S&P 500 rose to 2,964.33. The Dow gained 0.4 per cent to 26,717.43. The Nasdaq composite rose 1.1 per cent to 8,091.16.

The truce leaves 25 per cent import taxes imposed by the US on USD250 billon of Chinese imports in place. And China maintains the tariffs it placed on USD110 billion in American goods, primarily agricultural products.

Trump also said he would allow US companies to sell some components to Chinese telecommunications giant Huawei, which last month was placed on an American blacklist as a national security threat.

Technology stocks and banks accounted for a large share of Monday’s gains as traders turned their backs on more defensive holdings. Utilities and real estate stocks lagged the market in a sign of Wall Street’s bigger appetite for risk.

Chipmakers rallied on plans by the US to loosen some restrictions on sales to Huawei. Broadcom climbed 4.3 per cent and Micron Technology gained 3.9 per cent. Apple and Microsoft also rose.

ENERGY: Benchmark US crude lost one cent to USD59.08 per barrel in electronic trading on the New York Mercantile Exchange.

The contract rose 62 cents on Monday to close at USD59.09. Brent crude, used to price international oils, gained five cents to USD65.10 per barrel in London. It gained 32 cents the previous session to USD65.06.

CURRENCY: The dollar declined to 108.21 yen from Monday’s 108.44 yen. The euro advanced to USD1.1291 from USD1.1285.