LONDON: European markets slid today on the back of sharp Asian losses and overnight on Wall Street, as concern grew over the US economic outlook, dealers said.
With Wall Street closed on a US national day of mourning for the funeral of former president George H.W. Bush, European stocks tanked as investors faced a raft of problems from trade to Brexit that erased the positive start to the week when sharp gains were made after the US and China appeared ready to dial down their trade war.
After US President Donald Trump and Chinese counterpart Xi Jinping moved to a truce in their trade spat, Trump tweeted that he saw “very strong signals being sent by China,” after Beijing acknowledged a 90-day deadline to reach a tariffs agreement.
For Capital Economics, the two leaders “seem to have different understandings of what they have agreed. But the deal has, at least, paused the escalation of the dispute”.
European markets were not cheered, however, with London, Frankfurt, and Paris all off around one percent some two hours from the close as the uncertainty from Britain’s ongoing Brexit saga continued unabated.
“European stock markets are firmly in the red following the major losses incurred on Wall Street,” said CMC Markets analyst David Madden.
“From a political and economic point of view, not much has changed, but investor confidence has been shaken in light of the move in the US yesterday, and that is playing on investors’ minds.”
Wall Street had been pummelled Tuesday, the Dow losing 3.1 percent amid worries over slowing US growth and the trade spat with China.
While Trump hailed the deal at first, on Tuesday he warned on Twitter “remember, I am a Tariff Man”, adding: “When people or countries come in to raid the great wealth of our Nation, I want them to pay for the privilege of doing so.”.
In another tweet, he left open the door to an extension of the agreement’s 90-day timeline to end the row.
China’s commerce ministry Wednesday called the pact “successful” and said it “will start with the implementation of the specific matters in which consensus has been reached, the sooner the better.”
Concerns are also mounting about the US economy as short-term and long-term money market rates moved closer together, stoking fears of “inversion”.
If the process continues and short-term rates overtake long-term, it is often taken as a clear precursor to a recession.
The pound continued to struggle on concerns Britain could leave the EU without a deal, which most observers fear could hammer the economy.
Sterling had briefly hit a 17-month-low at $1.2659 after Prime Minister Theresa May suffered a series of stunning defeats in parliament that highlighted the fight she has in passing her Brexit deal.
If she loses there are expectations she will face a no-confidence vote and a defeat that could force early elections, leaving the country in chaos.
“May’s triple defeats in parliament are highly discouraging and may intensify fears over her Brexit deal being rejected next week,” said FXTM analyst Lukman Otunuga.
Separately, oil prices extended losses after another jump in US inventories and as Saudi Arabia raised questions about the chances of an output cut at a meeting of OPEC and non-OPEC members this week.
Saudi Energy Minister Khalid Al-Falih said it was “premature to say what will happen” in Vienna, days after Russian President Vladimir Putin had said the pair had agreed to maintain a production cap.
London – FTSE 100: DOWN 1.0 percent at 6,949.62 points
Frankfurt – DAX 30: DOWN 0.9 percent at 11,233.60
Paris – CAC 40: DOWN 0.9 percent at 4,960.84
EURO STOXX 50: DOWN 1.0 percent at 3,158.34
Tokyo – Nikkei 225: DOWN 0.5 percent at 21,919.33 (close)
Hong Kong – Hang Seng: DOWN 1.6 percent at 26,819.68 (close)
Shanghai – Composite: DOWN 0.6 percent at 2,649.81 (close)
New York – Dow Jones: CLOSED (Tuesday close 25,027.07 close)
Euro/dollar: DOWN at $1.1333 from $1.1343 at 2200 GMT
Dollar/yen: UP at 113.17 yen from 112.77
Pound/dollar: UP at $1.2728 from $1.2719
Oil – West Texas Intermediate: UP 24 cents at $53.49 per barrel
Oil – Brent Crude: UP 22 cents at $62.12
Asian markets mixed as investors eye trade talks
HONG KONG: Asian markets were mixed Tuesday with investors cautiously optimistic that China and the US can reach a deal ending their trade war as the two sides prepare to resume talks this week.
With New York closed for a public holiday there were few catalysts to drive buying, though the release of Federal Reserve minutes on Wednesday will be pored over for an idea of the bank’s interest rate plans.
Top-level officials from the world’s two biggest economies will reconvene in Washington after a series of talks in Beijing last week, with the US side telling President Donald Trump they had been “very productive”.
The positive tone from the diplomats, and the president’s indication he could extend a deadline for agreement, boosted regional markets Monday, extending a 2019 rally fuelled by optimism about an end to the nearly year-long tariffs spat.
Tokyo finished 0.1 percent higher, Hong Kong dipped 0.3 percent in the afternoon and Shanghai closed fractionally up.
Sydney gained 0.3 percent, Singapore put on 0.2 percent and Taipei 0.2 percent, with Seoul and Wellington each off 0.2 percent. Manila fell while Mumbai and Jakarta were up.
S. Korea resumes Iranian oil imports after five months
SEJONG: South Korean companies imported US$101.2 million worth of Iranian crude last month, the first such move in five months, data showed Tuesday.
The January figure represents less than one-fifth of $539 million, the average monthly Iranian crude oil imports for the first seven months of 2018, according to the data from the Korea Customs Service.
South Korean companies stopped importing Iranian crude oil in September last year, two months before the United States reinstated all sanctions against Tehran after lifting restrictions following the 2015 landmark nuclear deal.
Still, the U.S. has allowed South Korea and seven other countries to continue to buy Iranian oil over the next six months. South Korea is the third-largest buyer of Iranian oil.
South Korean refiners and chemical firms had relied heavily on Iranian condensate for production of various petrochemical products thanks to a stable supply and price competitiveness.
Naphtha, a key raw material for petrochemicals, is derived from condensate.
Saudi Arabia keen to strengthen trade relations with Pakistan: Fahad Al Bash
ISLAMABAD: Head of Saudi Business Delegation Eng. Fahad Al Bash here on Monday said that his country was keen to further strengthen trade relations with Pakistan as both states have huge potential to promote bilateral trade in many sectors.
He said a number of Pakistani products including value-added textile, surgical instruments, sports goods, food, Insurance & IT services and entertainment products could find good market in Saudi Arabia and it should focus on importing these products from Pakistan.
In an interview, he said “I want to express my heartfelt thanks to Prime Minister Imran Khan for his warm hospitality and want to thank the business community for welcoming us in the spirit of friendship. This trip will strengthen ties between our two countries as Saudi Arabia playing vital role for the growth of oil industry in Pakistan.”
He said both countries were enjoying unique and special relationship, expressing the hope that this trip to this brotherly country would further strengthen these ties.
“We’re proud of our deep-rooted ties with Pakistan”, he added.
“The Crown Prince Muhammad Bin Salman’s visit in Pakistan will help materialize numerous investment projects in Pakistan,” he said.
The delegate further highlighted, Saudi Arabia’s investment in Pakistan would reinforce investment from all over the world and with Saudi investment Pakistan will resume the trust of business communities in the world.
“We believed Pakistan is going to be a very important country in coming future and we want to be sure we are a part of it,” he added.
He said Saudis are keen to invest in Pakistan’s energy sector, particularly in renewable energy as there is huge investment opportunity for production of cheap energy to fulfill the growing local demand.