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Global stock markets were mixed on
Tuesday, with Wall Street snapping a multi-session losing streak, while
European and Asian bourses retreated amid the escalating US-China trade war.
Major US indices climbed more than one percent after China moved to
stabilize its currency, ending a five-day losing streak for the Dow and a
six-day skid for the S&P 500 and Nasdaq.
The China move “calmed the currency market and we saw the equity market
and the futures market start to turn positive,” said Quincy Krosby, chief
market strategist of Prudential Financial.
Equities had tumbled Monday after China allowed the yuan to slide sharply
against the dollar following US President Donald Trump’s announcement that he
would impose 10 percent tariffs on another $300 billion in Chinese goods.
Major US indices lost around three percent in Wall Street’s worst session
of 2019, while European and Asian stocks also tumbled on fears the protracted
US-China trade fight will derail the global economy.
On Tuesday, investors initially relaxed a bit after the People’s Bank of
China fixed the yuan at a higher level against the dollar than analysts had
expected, signaling a degree of restraint after Washington slapped the
“currency manipulator” label on China.
The yuan steadied while People’s Bank of China Governor Yi Gang vowed
China would not engage in a competitive devaluation.
But major bourses in Asia and Europe still finished in the red. A note
from Charles Schwab said “heightened uncertainty continued to hamper
sentiment.”
Tensions have risen sharply since last week when Trump announced fresh
tariffs on Chinese goods from September 1. The yuan’s slump was seen as a
retaliatory move by Beijing.
In spite of Tuesday’s moves by Beijing to boost the yuan, the latest back
and forth between the United States and Beijing, including the US designation
late Monday of China as a currency manipulator, “hardens trade tensions,”
said a note from Oxford Economics.
“Today’s announcement makes further Chinese trade concessions look
increasingly unlikely. This in turn increases the likelihood of the 10
percent tariff going ahead,” Oxford said, adding that the risk of a “currency
war” between the two countries “can’t be ruled out.”
– Key figures around 2045 GMT –
New York – Dow: UP 1.2 percent at 26,029.52 (close)
New York – S&P 500: UP 1.3 percent at 2,881.77 (close)
New York – Nasdaq: UP 1.4 percent at 7,833.27 (close)
London – FTSE 100: DOWN 0.7 percent at 7,171.69 (close)
Frankfurt – DAX 30: DOWN 0.8 percent at 11,567.96 (close)
Paris – CAC 40: DOWN 0.1 percent at 5,234.65 (close)
EURO STOXX 50: DOWN 0.6 percent at 3,291.66 (close)
Tokyo – Nikkei 225: DOWN 0.7 percent at 20,585.31 (close)
Hong Kong – Hang Seng: DOWN 0.7 percent at 25,976.24 (close)
Shanghai – Composite: DOWN 1.6 percent at 2,777.56 (close)
Pound/dollar: UP at $1.2163 from $1.2143 at 2100 GMT
Euro/pound: DOWN at 92.09 pence from 92.26 pence
Euro/dollar: DOWN at $1.1202 from $1.1203
Dollar/yen: UP at 106.49 yen from 105.95 yen
Brent North Sea crude: DOWN 1.5% at $58.94 per barrel
West Texas Intermediate: DOWN 1.9% at $53.63 per barrel
(BSS)
