Stocks mixed on US-China dispute; oil pushed up by hurricane

SINGAPORE (AP) — World markets were mixed yesterday as investors focussed on trade tensions, with China delaying licenses to American businesses ahead of expected tariffs from Washington. The price of oil continued to rise on concerns that Hurricane Florence could disrupt supplies.

KEEPING SCORE

In Europe, France’s CAC 40 gained 0.5 per cent to 5,309, while Britain’s FTSE 100 was down 0.2 per cent at 7,262. Germany’s DAX added 0.2 per cent to 11,988. Wall Street was poised to open slightly higher, with Dow and S&P 500 futures both rose 0.1 per cent.

ASIA’S DAY

Japan’s benchmark Nikkei 225 lost 0.3 per cent to 22,604.61, and the Kospi in South Korea was almost flat at 2,282.92. Hong Kong’s Hang Seng index was 0.3 per cent lower at 26,345.04. The Shanghai Composite index fell 0.3 per cent to 2,656.11. Australia’s S&P/ASX 200 shed 0.1 per cent to 6,175.90.

CHINA-US TENSIONS

China is putting off accepting license applications from American companies in financial services and other industries until Washington makes progress toward a settlement, an official of a business group said on Tuesday.

The disclosure is the first public confirmation of United States (US) companies’ fears that their operations in China or access to its markets might be disrupted by the battle over Beijing’s technology policy.

The license delay applies to industries Beijing has promised to open to foreign competitors, according to Vice President for China operations of the US-China Business Council Jacob Parker. The group represents some 200 American companies that do business with China.

President Donald Trump’s administration is poised to slap tariffs on USD200 billion in Chinese goods and is considering tariffs on USD267 billion more.

ANALYST’S TAKE

“China’s ability to respond is limited in tariffs, the government is using what they call ‘qualitative measures,’” said head of research and chief economist at ING Bank Robert Carnell. “You can’t put a number on that, but it’s not an idle threat. They could really make it hard for US companies to operate in China.”

BREXIT DEAL

Hopes for a Brexit deal rose this week, pushing up the pound and helping stock markets. Britain’s Treasury chief Philip Hammond said on Tuesday that he agreed with the European Union (EU) Brexit negotiator that reaching a divorce deal with the European Union over the next two months is “doable”. Business groups and civil servants say a “no-deal” Brexit could cause disruption in shipping, barriers to trade with the bloc, a fall in the value of the pound and even shortages of essential goods.

ENERGY

Benchmark US crude added 67 cents to USD69.92 a barrel, after surging past USD70 in the Asian session. The contract gained 2.5 per cent to USD69.25 per barrel in New York. The approach of Hurricane Florence and its potential to disrupt oil supply on the East Coast spurred gains.

The US is also getting ready to put sanctions on Iran’s energy industry. Brent crude, used to price international oils, rose 15 cents to USD79.21 a barrel. It jumped 2.2 per cent to USD79.06 a barrel in London on Tuesday.

CURRENCIES

The dollar fell to 111.48 yen from 111.59. The euro was down to USD1.1591 from USD1.1605, and the pounds was roughly steady at USD1.3023 after rising sharply the day before.