Stocks falter on trade tensions, Brexit, US shutdown

Traders work on the floor at the closing bell of the Dow Industrial Average at the New York Stock Exchange on January 10, 2019 in New York. — AFP pic
Traders work on the floor at the closing bell of the Dow Industrial Average at the New York Stock Exchange on 10, 2019 in New York. — AFP pic

LONDON, Jan 17 — Stock markets retreated today, with US- tensions, Brexit worries and a lingering US government shutdown taking their toll to a greater or lesser degree across the world’s trading platforms.

The pound recovered against both the dollar and the euro, a day after the UK government narrowly survived a no-confidence vote.

Key were around half a per cent lower in mid-afternoon, while the Dow Jones index in New York was down around 0.4 per cent shortly after the opening bell.

are mostly lower in early action, following yesterday’s jump, with the markets digesting a number of earnings reports as the season ramps up, while the government shutdown drags on today,” said analysts at the Charles Schwab brokerage.



In Europe, meanwhile, “political and economic risks weigh on sentiment,” said David Madden, analyst at CMC Markets UK.

British Prime Minister Theresa May scrambled to put together a new Brexit strategy on Thursday with cross-party talks after MPs sparked political turmoil by rejecting her previous agreement with the EU.

May reached out to rival parties shortly after surviving a no-confidence vote Wednesday, hoping to hammer out a Brexit fix that she could present to parliament next week.

Huawei weighs

Meanwhile after a tumultuous December for markets, global have enjoyed a broadly strong start to the year, largely thanks to optimism China and the US will resolve their trade row.

But confidence took a knock Wednesday from a report that said US officials were carrying out a criminal probe into tech giant Huawei and could soon indict the firm over allegations of theft of trade secrets from its American business partners.

Lawmakers have also introduced a bill to ban the export of American parts and components to Chinese telecom companies that are in violation of US export control or sanctions laws — with Huawei and fellow Chinese firm ZTE the likely targets.

“Huawei is effectively an intelligence-gathering arm of the Chinese Communist Party whose founder and CEO was an engineer for the People’s Liberation Army,” said Republican Senator Tom Cotton, one of the bill’s sponsors.



The developments follow the arrest last year in Canada of Huawei’s chief financial officer Meng Wanzhou, who is the daughter of the company’s founder and faces extradition to the US on Iran sanctions-linked fraud charges.

It also muddies the waters in trade talks between Beijing and Washington, which looked to be on a positive course after officials held three days of talks earlier this month, with both sides seemingly upbeat.

There are, meanwhile, deepening worries about the impact of the US government shutdown as it moves towards a fifth week, with Oxford Economics estimating it is slashing growth by US$700 million a week.

Key figures around 1435 GMT

London – FTSE 100: DOWN 0.7 per cent at 6,811.57 points

Frankfurt – DAX 30: DOWN 0.5 per cent at 10,875.93

Paris – CAC 40: DOWN 0.7 per cent at 4,777.17

EURO STOXX 50: DOWN 0.6 per cent at 3,059.11



New York – DOW: DOWN 0.4 per cent at 24,114.62

Tokyo – Nikkei 225: DOWN 0.2 per cent at 20,402.27 (close)

Hong Kong – Hang Seng: DOWN 0.5 per cent at 26,755.63 (close)

Shanghai – Composite: DOWN 0.4 per cent at 2,559.64 (close)

New York – DOW: UP 0.6 per cent at 24,207.16 (close)

Pound/dollar: UP at US$1.2907 from US$1.2877 at 2140 GMT

Euro/pound: DOWN at 88.24 pence from 88.44 pence

Euro/dollar: DOWN at US$1.1390 from US$1.1395



Dollar/yen: DOWN at 108.83 yen from 109.05

Oil – Crude: DOWN 73 cents at US$60.59 per barrel

Oil – West Texas Intermediate: DOWN 77 cents at US$51.54

— AFP

Source: The Malay Mail Online





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