NVDA Q3 Earnings Alert: Why our AI stock picker is still holding Nvidia stockRead More

Shares fall as Sino-U.S. tensions eclipse China GDP growth

Published 16/07/2020, 03:08 pm
© Reuters.
UK100
-
US500
-
AXJO
-
JP225
-
HK50
-
GS
-
USD/CNY
-
DE30
-
LCO
-
UK100
-
ESZ24
-
CL
-
EU50
-
KS11
-
MIAPJ0000PUS
-
CSI300
-

* Asian stock markets: https://tmsnrt.rs/2zpUAr4

* Bullish China GDP fails to inspire equities

* Geopolitical risk hampers markets

* Oil down as OPEC curbs output cuts

By Stanley White

TOKYO July 16 (Reuters) - Asian shares and U.S. stock futures fell on Thursday, weighed down by concern about deteriorating U.S.-China relations and the economic cost of a resurgence in coronavirus infections that is prompting some governments to reimpose containment measures.

Even news that China's economy rebounded more than expected in the second quarter from a record contraction was not enough to pull regional equities out of the red.

European markets looked set to follow Asia lower, with Euro Stoxx 50 futures STXEc1 falling 0.83%, German DAX futures FDXc1 down 0.73%, and FTSE futures FFIc1 off 0.53%.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS slid by 1.18%, while Tokyo's Nikkei .N225 fell 0.74%. U.S. S&P 500 e-mini stock futures ESc1 declined by 0.43%.

Shares in China .CSI300 fell 1.59% and Australian stocks .AXJO shed 0.9% after the country's jobless rate jumped to the highest since the late 1990s. Shares in Hong Kong .HSI and Seoul .KS11 also fell.

Oil futures also declined after OPEC and its allies agreed to scale back output cuts, renewing concerns over excess supply.

Risk appetite took a hit due to worries about a wide-ranging dispute between the United States and China over the control of advanced technologies and the protection of civil liberties in Hong Kong.

A second wave of coronavirus infections is also triggering a return to restrictions on business and personal activity that threaten to impede economic recoveries.

"The upside in financial markets is limited by the visible increase in coronavirus infections and tension between the world's two economic giants," said Masayuki Kichikawa, chief macro strategist at Sumitomo Mitsui Asset Management Co.

"However, the downside is limited due to very low interest rates and a brighter outlook for China's economy."

China's economy expanded by a better-than-expected 3.2% in the second quarter from a year earlier, returning to growth as lockdown measures ended and policymakers stepped up stimulus.

But its recovery is still uneven. Separate data showed China's industrial output beat expectations in June, but retail sales unexpectedly fell again, suggesting consumer demand remains weak. Secretary of State Mike Pompeo on Wednesday said the United States would impose visa restrictions on Chinese firms like Huawei Technologies Co Ltd HWT.UL that he accused of facilitating human-rights violations. Donald Trump's administration is also expected to take action in coming weeks to address perceived security risks posed by TikTok and WeChat, two popular Chinese mobile apps, a White House official said on Wednesday. moves would be the latest salvo in a dispute between Washington and Beijing that has unsettled markets.

Investors are also worried about jumps in coronavirus cases in the United States, Australia, and Japan.

On Wall Street the S&P 500 .SPX gained 0.91% on Wednesday, boosted by hopes for a vaccine and a strong quarterly report from Goldman Sachs (NYSE:GS) GS.N , but those gains failed to lift Asian stocks.

U.S. crude CLc1 fell 0.78% to $40.88 a barrel. Brent crude LCOc1 fell 0.62% to $43.52 per barrel following plans from OPEC and its allies to ease supply curbs. the currency market the Australian dollar AUD=D3 , the New Zealand dollar NZD=D3 , and the Chinese yuan CNY=CFXS all fell against the U.S. dollar amid rising risk aversion.

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Global assets

http://tmsnrt.rs/2jvdmXl Global currencies vs. dollar

http://tmsnrt.rs/2egbfVh Emerging markets

http://tmsnrt.rs/2ihRugV MSCI All Country Wolrd Index Market Cap

http://tmsnrt.rs/2EmTD6j

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Editing by Kim Coghill)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.