Stocks ease from highs as hopes fade over swift US-China deal
China-sensitive stocks dent European markets, FTSE slips, gold eases, but oil up
Global stocks fell on Thursday, unnerved that a break-through in tariff negotiations between the US and China may prove short-lived. This put trade-sensitive shares under pressure, in turn reining in the dollar.
On Wall Street, the three main 0'>indices were trading in the red, with trade-sensitive stocks leading the push lower and echoing the softer tone in Europe. There declines in banking stocks and luxury goods makers, which rely hugely on China for exports, saw the 0'>Stoxx50 close flat at 3,684.87 points.
In London, the 0'>FTSE 100 closed down 0.3 per cent at 7,238.55 points, with losses in miners and commodity stocks weighing down the broader index.
Reuters reported that completion of a phase-one deal between Washington and Beijing could slide into next year, citing people close to the White House. The Chinese government is pushing for more extensive rollbacks to existing tariffs with the US countering with additional demands of its own.
The dollar was mostly flat against a basket of major currencies, at around 97.93, but was set for a third, albeit modest, day of gains.
“At this point, it doesn't appear as though [US President Donald] Trump has made up his mind but the risks of a blowup are higher than markets are implying,” said InterMarket currency analyst Adam Button.
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On the commodities market, gold fell by around 0.2 per cent to $1,468 an ounce. 0'>Gold can benefit from a retreat in investor confidence, but if sentiment is negative enough, holders of gold will often sell to compensate for losses in other asset classes.
Industrial precious metal 0'>palladium was down 0.4 per cent at $1,761 an ounce. Palladium, used predominantly in the catalytic converters of gasoline-powered vehicles, is highly sensitive to the ebb and flow of rhetoric between the USand China, the world’s two largest car markets.
Major cryptocurrencies 0'>Bitcoin and Ethereum came under heavy fire, falling 6.1 and 8.1 percent, respectively, swept lower by the broad wave of risk aversion.
0'>Crude oil proved the outlier, with prices shooting up by about 1.5 percent to above $63 a barrel, driven in part by a drop in commercial inventories reported the previous day that suggested demand maybe healthier than some anticipated.