Investors sell global stocks, dollar on fears Trump agenda is foundering

European stock markets are set for a negative start after a van mowed through crowds of tourists in Barcelona yesterday. — Reuters picEuropean stock markets are set for a negative start after a van mowed through crowds of tourists in Barcelona yesterday. — Reuters pic, Aug 18 — Asian stock investors joined a global retreat from riskier assets today and the dollar wavered on rising doubts about US President Donald Trump’s ability to deliver his economic agenda.

European stock markets are also set for a negative start, with financial spreadbetter CMC Markets expecting Britain’s FTSE 100 to open 0.5 per cent lower, and Germany’s DAX and France’s CAC 40 to start the day down 0.7 per cent.

Confidence was shaken further after a van mowed through crowds of tourists in Barcelona yesterday, killing at least 13 people and injuring more than 100 in an attack that authorities were treating as Islamic terrorism.

In Cambrils, a town south of Barcelona, police said they had killed five attackers last night to thwart a linked “terrorist attack.”

The MSCI World index slipped 0.1 per cent, adding to yesterday’s 0.8 per cent drop and heading for a flat end to the week.

MSCI’s broadest index of Asia- shares outside Japan dropped 0.5 per cent, but still looked set to gain 1.4 per cent for the week after tensions between North Korea and the United States came off the boil.

Japan’s Nikkei slid 1.2 per cent on global jitters and a stronger yen, and looked set to lose 1.4 per cent for the week.

“The realisation of the worst case scenarios (in Washington and in North Korea) would likely bring about a more significant drop in global ,” said Jingyi Pan, market strategist at IG in Singapore.

Until then, “sentiment may remain the driver for the fluctuations in the markets and could make for good entry opportunity for regional markets,” she added.

blue chips slipped 0.2 per cent, after data showed growth in new home prices slowed in July, but looked set for a 1.9 per cent weekly gain as a year-long construction boom boosted shares of building materials firms.

Hong Kong’s Hang Seng retreated 0.7 per cent, up 1.05 per cent for the week.

Overnight, ’s major indexes slumped between 1.2 per cent and 1.9 per cent. The S&P 500 index posted its biggest drop in three months.

Concerns have grown over Trump’s ability to push through his economic goals, such as tax cuts and infrastructure spending, following the exodus of executives from two prominent business councils in reaction to his response to clashes last weekend in Charlottesville, Virginia.

Trump yesterday decried the removal of pro-slavery Civil War Confederacy monuments, which have fuelled US racial tensions, stoking worries that some of his key policy staffers and aides may quit.

Chief among them were rumours that Gary Cohn, director of the National Economic Council, would resign, following Trump’s defence of white supremacist protesters in Charlottesville.

A statement from the White House that Cohn intends to remain in his position calmed markets only briefly before selling resumed.

“Diminishing West Wing support from both business and political allies will continue to abrade investors’ confidence in President Trump’s economic agenda,” Stephen Innes, head of Asia Pacific trading at OANDA in Singapore.

“The dollar, for the most part, remains in a state of directionless confusion, supported on the one hand by resurgent US economic data yet burdened by the expanding White House rat’s nest.”

The dollar posted its third session of losses against the yen, falling 0.25 per cent to 109.31 yen and shrinking this week’s gains to 0.3 per cent.

The dollar index, which tracks the greenback against a basket of six major peers, was flat at 93.597, surrendering moderate early gains.

The index rose earlier on weakness in the euro, the biggest component of the basket, after minutes of the European ’s July meeting showed policymakers were worried about a possible overshoot in the common currency, whose strength is making the bloc’s exports less attractive and imports cheaper.

The euro inched up 0.1 per cent to US$1.1736, making up some of the previous session’s 0.4 per cent drop.

Bitcoin, which hit an all-time high of US$4,480 in the previous session before closing lower, inched up 0.2 per cent to trade at US$4,285, up 17.6 per cent this week.

In commodities, oil prices pulled back following recent gains.

Global benchmark fell 0.1 per cent to US$50.99 a barrel, after jumping 1.5 per cent yesterday on a drop in US inventories. It is on track for a 2.15 per cent decline for the week.

US crude also lost 0.1 per cent to US$47.05 today, surrendering some of yesterday’s 0.7 per cent gain, heading for a 3.6 per cent weekly loss.

Spot was steady today at US$1,286.85 an ounce, holding most of yesterday’s 0.4 per cent gain. It is set to end the week down 0.1 per cent.

Industrial metals, which posted multi-year highs this week, waned today as investors took profits.

Three-month copper on the London Metal Exchange was down 0.3 per cent to US$6,468.50 a tonne, extending yesterday’s 0.6 per cent drop.

Benchmark zinc, which set a new decade high of US$3,147 a tonne yesterday, closed lower but was up 1.05 per cent at US$3,094.50 today. — Reuters

Source: The Malay Mail Online

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