Stock Markets Retreat After Strong Run 12 June 2019
Sumaira FH 7 days ago Thu 13th June 2019 | 12:13 AM
Stock markets pulled back Wednesday after a strong run over several sessions as attention returned to US-China trade tensions, dealers said
Asian markets kicked off the losses after two days of healthy gains, with Hong Kong the worst performer -- sinking two percent as a huge anti-government protest paralysed key roads in the city before turning violent.
European indices followed suit with losses of around half a percent by the close, while Wall Street, having opened steady, slid gently downwards throughout the New York morning.
"US stocks are dipping in early action, after snapping a five-day winning streak yesterday, with the heightened US-China trade tensions countering elevated Fed rate cut expectations and the recent deal that averted increased tariffs on Mexico," brokers Charles Schwab said.
Profit-takers moved in also as traders keep a nervous eye on developments in the China-US trade saga ahead of an expected meeting between Donald Trump and Xi Jinping at the G20 summit in Japan later this month.
The dollar was mixed on Wednesday, while oil prices tumbled.
Stock markets had rallied in recent days on the prospect of a US interest rate cut and broader central bank dovishness which helped to offset lingering US-China trade war tensions.
US Commerce Secretary Wilbur Ross tempered expectations that the US and China will reach an agreement when Trump and Xi meet.
Elsewhere, oil prices slumped after data pointed to a jump in US stockpiles, exacerbating worries about oversupply and weakening demand growth.
"Oil prices have struggled to retain (recent) bullish gains as traders stay cautious over heightened geopolitical risks and persistent weakness in the global economic backdrop," said Benjamin Lu, commodities analyst with Phillip Futures in Singapore.
Lu and other analysts said oil prices had been winning support from expectations that OPEC and Russia would agree at a meeting this month to extend output cuts beyond June.
Elsewhere in commodities, cocoa futures rose sharply after key producers Ivory Coast and Ghana stopped sales in a push for higher prices, dealers said.
The September forward contract for the commodity, listed in New York, reached an 11-month high, hitting $2,545, a rise of around 1.6 percent on the day.
The two African nations, which together account for 60 percent of the world's cocoa production, summoned buyers to Accra demanding a price of $2,600 per tonne.
The meeting reached agreement in principle, a Ghana official announced, but implementation remains an issue.
- Key figures around 1540 GMT - London - FTSE 100: DOWN 0.4 percent at 7,367.62 points (close) Frankfurt - DAX 30: DOWN 0.3 percent at 12,115.68 (close) Paris - CAC 40: DOWN 0.6 percent at 5,374.92 (close) EURO STOXX 50: DOWN 0.4 percent at 3,386.63 New York - Dow: DOWN 0.2 percent at 25,995.70 Tokyo - Nikkei 225: DOWN 0.4 percent at 21,129.72 (close) Hong Kong - Hang Seng: DOWN 1.7 percent at 27,308.46 (close) Shanghai - Composite: DOWN 0.6 percent at 2,909.38 (close) Euro/dollar: DOWN at $1.1320 from $1.1328 at 2040 GMT Pound/dollar: UP at $1.2725 from $1.2723 Dollar/yen: DOWN at 108.46 yen from 108.51 yenOil - Brent North Sea: DOWN $1.16 at $61.13 per barrelOil - West Texas Intermediate: DOWN $1.21 at $52.06 per barrel