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Stock markets retreat after run higher

Jun 12 2019 16:08

Stock markets mostly retreated on 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 2% 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 in afternoon deals.

Wall Street opened steady, but quickly began to slip.

"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 this month.

The dollar was mixed on Wednesday, while oil prices tumbled.

"There isn't a whole lot for the European indices to deal with," noted Connor Campbell, analyst at Spreadex trading group.

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 has 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.

On the corporate front, bosses at French carmaker Renault were expected to face robust questioning by shareholders on Wednesday following the collapse of merger plans with Fiat Chrysler while its troubled alliance with Nissan remains mired in crisis.

equities  |  markets  |  global markets


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