Global stocks mostly lower on worries over trade, interest rates

US Treasury Secretary Steve Mnuchin is among the high-level officials visiting China for closely watched trade talks
AFP

New York (AFP) – Global stock markets mostly retreated Thursday as concerns about trade wars nibbled at investor confidence and US shareholders continued to be unimpressed by solid corporate earnings.

Top US and Chinese officials played down expectations at the start of key negotiations in Beijing that will attempt to stabilize the relationship after threats and counter-threats between Beijing and Washington over the last month or so.

The US delegation includes Treasury Secretary Steven Mnuchin and White House economic adviser Peter Navarro, a China critic. Xi Jinping’s top economic advisor Vice Premier Liu He is leading the talks for China.

“Nerves before US-China trade talks and a little reverberation from yesterday’s meeting of the Federal Reserve have kept markets on edge,” said market analyst Jasper Lawler at London Capital Group.

The main indices in London and Paris shed 0.5 percent, while Frankfurt closed down 0.9 percent.

Wall Street stocks also finished mostly lower, with analysts citing trade worries as among the main issues pressuring sentiment.

A note from Oxford Economics warned of “exaggerated” market caution in the wake of the US-China tensions.

“Over the past two years, markets have broadly conformed to the expected flight-to-safety response to rising trade tensions,” Oxford said in a note. 

“Yet the scale of some market moves appears disproportionate,” Oxford added, alluding to the “relatively low” odds of a full-scale trade war. 

US analysts have described investor sentiment as broadly bearish as a strong earnings season winds down, with solid results from Amazon, Apple and others having failed to ignite a market rally. 

– Tesla CEO meltdown –

Besides trade, political turmoil in Washington involving President Donald Trump is another source of unease, along with worries about the Federal Reserve’s ongoing drive to hike interest rates.

“There has been a persistent inclination to sell into strength and a lack of conviction to buy on dips as a result of it,” said Briefing.com analyst Patrick O’Hare.

Among individual companies, Tesla Motors was under scrutiny following a public meltdown by chief executive Elon Musk, who responded testily to analyst questions Wednesday about the need to raise capital and other financial matters, dismissing the queries as “boring” and “not cool” and refusing to answer.

He also said investors should not buy Tesla stock if they are afraid of volatility. “We have no interest in satisfying the desires of daytraders. I couldn’t care less,” Musk said.

JPMorgan Chase called Musk’s behavior “truly bizarre” and expressed concern about the progress of the company’s ambitious plans to escalate production on its Model 3 sedan. Shares finished down 5.6 percent.

– Key figures around 2100 GMT – 

New York – Dow: UP less than 0.1 percent at 23,930.15 (close)

New York – S&P 500: DOWN 0.2 percent at 2,629.73 (close)

New York – Nasdaq: DOWN 0.2 percent at 7,088.15 (close)

London – FTSE 100: DOWN 0.5 percent at 7,502.69 (close) 

Frankfurt – DAX 30: DOWN 0.9 percent at 12,690.15 (close)

Paris – CAC 40: DOWN 0.5 percent at 5,501.66 (close) 

EURO STOXX 50: DOWN 0.7 percent at 3,529.12 (close)

Hong Kong – Hang Seng: DOWN 1.3 percent at 30,313.37 (close)

Shanghai – Composite: UP 0.6 percent at 3,100.86 (close)

Tokyo – Nikkei 225: Closed for a public holiday

Euro/dollar: UP to $1.1990 from $1.1951 at 2100 GMT

Pound/dollar: DOWN to $1.3571 from $1.3576 

Dollar/yen: DOWN to 109.19 yen from 109.84

Oil – Brent North Sea: UP 26 cents at $73.62 per barrel

Oil – West Texas Intermediate: UP 50 cents at $68.43 per barrel 

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