Join +750K new investors every month who copy stock picks from billionaire's portfoliosSign Up Free

GLOBAL MARKETS-World stocks stall as U.S.-China tensions flare again

Published 28/11/2019, 08:11 pm
© Reuters.  GLOBAL MARKETS-World stocks stall as U.S.-China tensions flare again
GBP/USD
-
AUD/USD
-
JP225
-
HK50
-
SOGN
-
ESU24
-
NQU24
-
DE10YT=RR
-
MIAPJ0000PUS
-
MIWD00000PUS
-
SX8P
-
SXAP
-

* Hong Kong law hurts optimistic mood

* World stocks fall after approaching record high

* Yen rises from six-month low to dollar; bonds rally

* Pound gains after poll shows Conservatives winning majority

(Updates throughout, changes byline, dateline)

By Sujata Rao

LONDON, Nov 28 (Reuters) - A four-day rally that had lifted world stocks to near-record highs stalled on Thursday as a U.S. bill backing Hong Kong's protesters became law, provoking China's ire and threatening to derail an interim trade deal between Washington and Beijing.

Fading hopes of a rapprochement between the world's two biggest economies before additional, potentially damaging tariff hikes kick in, also helped safe-haven assets such as U.S. and German bonds and lifted the yen from six-month lows.

The U.S. legislation, which threatens sanctions for human rights violations and seeks to safeguard Hong Kong's autonomy, prompted China to warn of "firm counter measures". risk-off moves clearly reflect a concern this could be an impediment to the 'Phase One' trade deal which is now widely expected," said Adam Cole, a strategist at RBC Capital Markets.

Wall Street's main indexes closed at record levels for a third straight day on Wednesday, albeit in thin liquidity before the Thanksgiving holiday, after data showed U.S. economic growth had picked up in the third quarter and consumer spending had increased. though, the outlook for growth looks less rosy. Japanese retail figures slumped the most since 2015 as a sales tax hike dragged on the economy, exacerbating a slowdown caused by slowing exports and manufacturing took Asian shares excluding Japan down 0.2% .MIAPJ0000PUS . Japan's Nikkei .N225 , Hong Kong's Hang Seng .HSI and Shanghai blue chips .CSI200 all closed weaker. A pan-European index opened 0.2% lower, led by trade-sensitive sectors such as autos and tech .SXAP .SX8P .

That kept MSCI's world equity index flat, after it approached the record reached in January 2018. However, the index is up almost 3% so far in November and is on track for the best month since June as investors flit in and our depending on the trade news .MIWD00000PUS .

"People don't want to be caught on the wrong side," said Geoff Yu, head of the UK investment office at UBS Wealth Management. "It does reflect there's cash on the sidelines. If you can stretch the positive narrative, if the trade issue is out of the way for the time being, we might actually see a demand pick up."

U.S. markets are closed for Thanksgiving, but equity futures for all three major indexes were down around 0.3% ESc1 YMc1 NQc1 .

HONG KONG AND BREXIT JITTERS

Jitters over a renewed Sino-U.S. fracas also showed up in currency and bond markets. U.S. bond markets are closed, but German yields fell to their lowest in nearly a month, down 1.5 basis points on the day DE10YT=RR

Japan's yen, a currency investors flock to in times of trouble, gained 2% against the dollar JPY=D3 , rising as high as 109.40 yen per dollar. The Australian dollar AUD= and the offshore Chinese yuan lost around 0.2% CNH=D3 .

The British pound GBP= rose on Wednesday after a model for pollsters YouGov, which accurately predicted the 2017 election, said Prime Minister Boris Johnson was on course to win a majority in parliament at the Dec. 12 election. the currency failed to build on its gains, trading around $1.294. It was flat versus the euro after surging to its highest in nearly seven months at 85 pence EURGBP=D3 .

Implementing Brexit by the end of January, as Johnson had promised, would leave him a "miniscule" 11 months to agree a trade deal with the European Union, analysts at Societe Generale (PA:SOGN) told clients.

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.