Asian, European stocks up after historic N Korea summit

13-Jun-2018 Intellasia | AFP | 6:02 AM Print This Post

Europe’s stocks markets faltered Tuesday as initial optimism faded over US President Donald Trump’s historic summit with North Korean leader Kim Jong Un, dealers said.

Frankfurt, London and Paris had shot higher at the opening bell, in tandem with gains across Asia, but ran out of steam as the morning progressed.

“The general reaction in the markets has been fairly muted,” OANDA analyst Craig Erlam told AFP.

“While the outcome of the summit is generally positive and gives reason for optimism, there may also be an element of scepticism from investors in regards to what denuclearisation means, the timescale and whether the deal will be sustained.”

Enthusiasm petered out elsewhere in Europe as traders looked ahead to key policy meetings of the Federal Reserve and European Central Bank later this week.

– ‘Special bond’ –

Trump said he had formed a “special bond” with Kim at their Singpore meeting, with the latter reaffirming his commitment to “complete denuclearisation of Korean Peninsula” in a joint agreement signed by the two.

While the meeting was not expected to see any immediate results, it has provided hope for peace on the Korean peninsula.

Global equity markets had rallied Monday as traders brushed off a chaotic Group of Seven meeting to focus instead on Trump’s summit with North Korea.

However, markets were unhappy with the vague nature of the Tuesday’s agreement, according to Spreadex analyst Connor Campbell.

“The markets began to unravel the optimism that propelled them higher on Monday, investors seemingly unsatisfied with what the vagueness of what was agreed between the US and North Korea,” Campbell noted.

Investors also remain concerned about a possible global trade war after the weekend’s G7 gathering in Canada ended with Trump withdrawing support for a joint communique and accusing host prime minister Justin Trudeau of being dishonest.

That came just after he had hit Canada, Mexico and the European Union with steel and aluminium tariffs, sparking threats of retaliation that some fear could escalate.

Back in London on Tuesday, stocks and the pound struggled in the face of political uncertainty, as British prime minister Theresa May faces a potentially divisive parliamentary vote on her centrepiece Brexit legislation.

Official data meanwhile showed that Britain’s unemployment rate held in April at 4.2 percent, which was the lowest level since 1975 and matched the three months to March.

Separately, traders are keenly awaiting this week’s Fed and ECB policy meetings. The US bank is expected to lift interest rates Wednesday but its post-meeting statement will be closely watched for a clue about its plans for future hikes.

On Thursday, ECB officials will likely debate for the first time cutting back on their crisis-era stimulus programme.

– Key figures around 1030 GMT –

LondonFTSE 100: DOWN 0.4 percent at 7,706.92 points

ParisCAC 40: DOWN 0.4 percent at 5,454.76

FrankfurtDAX 30: DOWN 0.2 percent at 12,819.36

euro O STOXX 50: UP 0.5 percent at 3,465.23

TokyoNikkei 225: UP 0.3 percent at 22,878.35 (close)

Hong KongHang Seng: UP 0.1 percent at 31,103.06 (close)

ShanghaiComposite: UP 0.9 percent at 3,079.80 (close)

New YorkDow Jones: FLAT at 25,322.31 (close)

euro/dollar: UP at $1.1794 from $1.1784 at 2100 GMT

Pound/dollar: UP at $1.3403 from $1.3379

Dollar/yen: UP at 110.20 yen from 110.03 yen

OilBrent Crude: UP 30 cents at $76.76 per barrel

OilWest Texas Intermediate: UP 20 cents at $66.30–finance.html


Category: FinanceAsia

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