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Oil prices tumbled Tuesday as lingering
questions over the US-China trade talks weighed on sentiment on a mixed day
for global equity markets.
Both US benchmark West Texas Intermediate and London’s Brent oil fell
sharply on signs Beijing and Washington may be drifting further apart again.
Worries about the trade war have weighed on the global growth outlook,
crimping petroleum demand. Analysts are also on edge ahead of a weekly US oil
inventory report that is expected to show higher stockpiles.
“The lack of breakthrough or concrete progress on an initial US-China deal
continues to create headwinds, particularly after both sides had offered
indications that a signed phase one agreement was seemingly imminent only a
few weeks earlier,” said a note from Robbie Fraser, senior commodity analyst
at Schneider Electric.
The latest hang-up in talks has been signs that China will agree to a
“phase one” agreement only if Washington agrees to remove some existing
tariffs, something US President Donald Trump has opposed.
At the close, European stocks were mixed after giving up most or all of
their earlier gains, while Wall Street finished mostly lower, with the Dow
and S&P 500 retreating from records, even as the Nasdaq notched a third
straight all-time high.
– Home Depot slumps –
The Dow was weighed down by a more than five percent drop in Home Depot
shares as it slashed its full-year sales forecast, saying the payoff from
investments in e-commerce and other ventures was taking longer than expected.
Despite that disappointment, analysts took heart in other aspects of the
Home Depot report, including a 3.6 percent increase in comparable sales.
They also cited better-than-expected US home construction data.
“The economy seems to be settling into a trend level growth pattern of
something in the 2% range,” economist Joel Naroff said in a client note.
“An improvement in home construction would help offset what is likely to
be a slowdown in consumption to a more sustainable pace.
“The major unknown remains the trade tensions,” he added.
Earlier, Hong Kong’s main stocks index extended Monday’s rally with
another surge but continuing protests in parts of the city — particularly a
violent standoff at a university — remained a source of worry.
The gains come as the widespread protests that hammered the city’s
transport network last week appear to have become less disruptive over the
past two days.
The pound, meanwhile, retreated after strong gains on Monday, with
expectations that British Prime Minister Boris Johnson’s ruling Conservative
party will win next month’s general election with a healthy majority, helping
him to push through his Brexit deal.
– Key figures around 2140 GMT –
New York – Dow: DOWN 0.4 percent at 27,934.02 (close)
New York – S&P 500: DOWN 0.1 percent at 3,120.18 (close)
New York – Nasdaq: UP 0.2 percent at 8,570.66 (close)
London – FTSE 100: UP 0.2 percent at 7,323.80 (close)
Frankfurt – DAX 30: UP 0.1 percent at 13,221.12 (close)
Paris – CAC 40: DOWN 0.4 percent at 5,909.05 (close)
EURO STOXX 50: DOWN 0.2 percent at 3,696.56 (close)
Tokyo – Nikkei 225: DOWN 0.5 percent at 23,292.65 (close)
Hong Kong – Hang Seng: UP 1.6 percent at 27,093.80 (close)
Shanghai – Composite: UP 0.9 percent at 2,933.99 (close)
Euro/dollar: UP at $1.1077 from $1.1072 at 2100 GMT
Pound/dollar: DOWN at $1.2922 from $1.2953
Euro/pound: UP at 85.71 pence from 85.48 pence
Dollar/yen: DOWN at 108.54 yen from 108.68 yen
Brent North Sea crude: DOWN 2.5 percent at $60.91 per barrel
West Texas Intermediate: DOWN 3.2 percent at $55.21 per barrel
(BSS)
