Stock markets under pressure as trade fears fester

The won rose after confirmation that North Korean leader Kim Jong Un had visited Beijing this week

London (AFP) – Stock markets in Europe and Asia were mostly lower on Wednesday as trade war fears continued to niggle at investor confidence, but Wall Street managed modest rebound in early business, traders said.

The volatility that has raked trading floors since the start of February shows no sign of abating, they predicted.

“Stock markets are likely to remain explosively volatile and wildly unpredictable amid the ongoing trade drama between the US and China,” said Lukman Otunuga, an analyst at FXTM.

Most European markets were down, but London’s benchmark FTSE 100 index managed a slight rise.

Wall Street was up around 0.5 percent at the opening bell, receiving some support from an upward revision for fourth quarter US growth, analysts said.

In the previous session, the biggest names in the tech sector suffered sharp falls, made worse by reports the US was considering cracking down on Chinese investments in technologies it deems sensitive.

Tech sector selling continued on Wednesday, with South Korea’s Samsung losing 2.6 percent.

“Markets remain under pressure as the sell-off in tech spreads once more to the wider equities space,” said Chris Beauchamp, chief market analyst at IG trading group.

In foreign exchange, the dollar rose against the euro despite talk that the European Central Bank is heading towards winding down its crisis-era stimulus.

Markets were then sent into spasms this month when Trump imposed tariffs on steel and aluminium imports, then followed up last Thursday with levies on $60 billion of other goods from China over intellectual property issues — sparking talk of a trade war. 

Those fears were soothed somewhat — and markets bounced back — as it emerged high-level talks had been taking place between the world’s top two economies to find an agreement on tariffs.

In commodities trading Wednesday, oil prices slipped on indications of weak US demand after data from an industry body pointed to a pick-up in stockpiles.

The commodity had been rising on expectations of tighter supplies from the Middle East after US President Donald Trump appointed hawk John Bolton as his national security adviser, fuelling fears he would push for an end to the Iran nuclear deal.

– Key figures around 1335 GMT –

London – FTSE 100: UP 0.2 percent at 7,011.08 points 

Frankfurt – DAX 30: DOWN 0.5 percent at 11,907.87 

Paris – CAC 40: DOWN 0.2 percent at 5,102.32 

EURO STOXX 50: DOWN 0.1 percent at 3,313.54

New York – Dow: UP 0.4 percent at 23,956.01

Tokyo – Nikkei 225: DOWN 1.3 percent at 21,031.31 (close)

Hong Kong – Hang Seng: DOWN 2.5 percent at 30,022.53 (close)

Shanghai – Composite: DOWN 1.4 percent at 3,122.29 (close)

Dollar/yen: UP at 106.09 yen from 105.36 yen at 2100 GMT 

Euro/dollar: DOWN at $1.2374 from $1.2402 

Pound/dollar: DOWN at $1.4124 from $1.4159

Oil – Brent North Sea: DOWN 43 cents at $69.03 per barrel

Oil – West Texas Intermediate: DOWN 57 cents at $64.68