The Gulf Time Newspaper One of the finest business newspapers in the UAE brought to you by our professional writers and editors.
Bloomberg
US equity futures fell alongside European stocks on fresh headwinds from disappointing corporate earnings and geopolitical tension in Asia. The dollar and Treasuries held steady as traders awaited the second half of the Federal Reserve chairman’s testimony to Congress.
The Stoxx Europe 600 index declined as Air France-KLM dropped the most ever and Nivea hand-cream maker Beiersdorf cut guidance, triggering a downdraft in travel and consumer stocks including giant Unilever.
S&P futures slipped, Japan equities came off their highs and Hong Kong shares erased an advance after Pakistan said it downed two Indian jets. While news of the worst escalation between the two nations since the 1971 war initially boosted the yen and weakened India’s rupee, volatility gauges continued lower.
The pound headed for its highest close since last June, spurred by a promise from UK Prime Minister Theresa May for a vote to delay Brexit if her proposed deal fails. Brent oil futures climbed above $66 a barrel.
Investors have added the India-Pakistan flare-up to a host of uncertainties they’re tracking, from China trade talks to Brexit, that could rein in a recovery in global equities from December lows.
US President Donald Trump is in Hanoi for a second summit with North Korean leader Kim Jong Un, with the outcome uncertain. Powell’s testimony on Tuesday helped steady the ship, though, as he gave no indication that the Fed is ready to alter policy any time soon.
India’s rupee reversed gains and Pakistan’s benchmark stock index plunged more than 3 percent in Karachi before recovering after the latest escalation in tensions. The Pakistani action came a day after India’s Air Force jets bombed what it said was a terrorist training camp inside Pakistan.
The advance in oil futures is reversing some of its loss from earlier in the week that was spurred by criticism from Trump that prices are too high.
Stocks
The Stoxx Europe 600 Index declined 0.2 percent as of 8:41 a.m. New York time. Futures on the S&P 500 Index fell 0.2%, while the MSCI Asia Pacific Index was unchanged. The MSCI Emerging Market Index fell 0.2 percent, while India NSE Volatility Index rose 10.4%.
Currencies
The Bloomberg Dollar Spot Index fell less than 0.05 percent. The euro was unchanged at the strongest in more than three weeks.
While the British pound jumped 0.5 percent to $1.3323, the strongest in more than eight months, Japanese yen dipped 0.1 percent to 110.69 per dollar and the Indian rupee fell 0.2 percent.
shell-shocked Stock Investors See No Reason to Trust Asia Rally
Asia stocks just notched their best streak in a year, China’s in a bull market and momentum indicators are white hot. But while money managers say they welcome the recovery from last quarter’s pummeling, they have yet to find any good reason to trust it.
Even the ones who avoided selling everything before markets turned around are preaching caution. Andrew Jackson, head of Japanese equities at Soochow CSSD Capital Markets, is long some technology shares but says he will sell at the first sign of trouble. Olivier d’Assier at Axioma Inc. advises buying cheap hedges as the US-China tariff saga drags on.
Though stymied, the MSCI Asia Pacific Index posted a six-day advance that qualified as the longest in a year.
China’s CSI 300 Index and Shanghai Composite Index entered bull markets on indications the government will weaken its leverage crackdown. The Asian benchmark gauge gained 0.1 percent as of 4:27 pm in Hong Kong on Wednesday.
Still, with December’s drubbing fresh in mind, investors were practically unanimous that remains too early to sound all-clear on the region’s economies or politics.