European Stocks Shrug Off Weakness in Asia

European Stocks Shrug Off Weakness in Asia

European Stocks Shrug Off Weakness in Asia

Global stocks were mixed Thursday, as the macroeconomic anxieties behind recent wild swings continued to drag on Asian bourses.

The Stoxx Europe 600 was up 0.2% in opening trading, slightly extending its rally so far this week after dropping 5% in the past month.

That followed a drop in Asia-Pacific markets, where Chinese stocks in particular took another hammering. Shanghai’s composite index fell 2.9% and the Shenzhen A-Share dropped 2.7%. Sentiment was downbeat across other major Asian indexes as well, although only those Chinese indexes fell by more than 1%.

Losses in Asia came after U.S. stocks resumed selling late Wednesday, with the S&P 500 having closed down on eight of the past 10 trading days. In futures trading, the index was on course to open 0.5% lower, as was the Dow Jones Industrial Average.

Those moves came against a backdrop of recent market volatility, with investors increasingly concerned about rising bond yields, the state of the U.S. and China’s trade relationship and global growth.

The Chinese yuan was down against the U.S. dollar, hitting a fresh 21-month low, after U.S. Treasury Secretary Steven Mnuchin criticized Beijing’s “lacks of currency transparency,” saying that its currency practices pose “major challenges to achieving fairer and more balance trade.”

While Mr. Mnuchin stopped short of formally labeling China a “currency manipulator,” the move came after months of sharp rhetoric between the Trump and Xi administrations. Washington also announced it was pulling out of a 144-year-old postal treaty with Beijing that helped Chinese retailers.

The WSJ Dollar Index, which measures the currency against a basket of 16 others, was last up 0.1%, extending its rise so far in 2018 to 4.6%.

Worries that growth may be slowing in the world’s second largest economy have sharpened investors’ focus on Chinese economic figures, and assets could take another hit if analyst forecasts for slowing growth in 2018’s third quarter are proven correct.

Economists polled by The Wall Street Journal forecast growth of 6.6% versus 6.7% in the second quarter, with analysts pointing to softer data in both China’s production and consumption sectors.

“People are worried that China’s slowing is more real than in 2015” said Shawn Snyder, head of investment strategy at Citi Personal Wealth Management. “Some companies, like Apple and Louis Vuitton, are also talking about Chinese demand slowing.”

Elsewhere, investors were watching for any further signs of political strife in Europe, with negotiations for the U.K. to leave the European Union showing no end in sight, and Italian budget negotiations with European lawmakers also dragging on.

In commodities, Brent crude oil was down 0.4% at $79.73 a barrel, extending the heavy losses that followed unexpectedly buoyant U.S. inventory figures. Gold prices were down 0.1% at $1,221.22 a troy ounce.

Source : hellenicshippingnews


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