Hong Kong violence and Trump trade comments dampen mood as markets stutter

Markets react to Trump caution on trade talks and ongoing chaos in Hong Kong

World markets reacted predictably to a batch of gloomy political and economic developments, with violent protests in Hong Kong, sluggish growth in the UK and Spanish election stalemate turning moods grey and trading screens red.

In the UK, the FTSE was down 30.84 points at 7,328.54, a fall of 0.42 per cent for the day, while the pan-European STOXX 50 ended the day slightly down on 3,699, a 0.04 per cent drop.

Comments by President Trump over the weekend which seemed to dampen hopes of an imminent US-China trade deal helped ensure a similarly slow start to the week on Wall Street, with the S&P 500 slipping by 0.35 per cent in early trading, and the Dow Jones Industrial Average down 0.33 per cent.

Inevitably, the Hong Kong’s Hang Seng market recorded the strongest reaction to the ongoing protests on the territory’s streets that left two people in critical condition in hospital on Monday. The index closed 2.62 per cent down, on 26926.55. Elsewhere in Asia, Tokyo’s Nikkei 225 slipped by 0.26 per cent, and Shanghai’s SSEC by 1.83 per cent.

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The gloom was infectious, with gold, copper and natural gas spending much of the day in the red. Oil prices dipped after Trump appeared to pull back on the possibility of the US lifting tariffs on China.

In the currency markets, the pound stood at $1.2880 in late afternoon trading, up 0.86 per cent on the day. The euro was also up against the dollar, trading at $1.1034 by late afternoon. Bitcoin registered a steep slide, falling to $8,723 at one point on Monday, or nearly 3.4 per cent down on the day.

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