Global stocks falter on geopolitical jitters
NEW YORK: Wall Street opened lower yesterday as geopolitical worries from Washington to the Middle East continued to curb some investor enthusiasm. About 10 minutes into the day’s trading, the Dow Jones Industrial Average had given up 0.3 percent to 21,132.53, the broader S&P 500 also was down 0.3 percent at 2,429.54 and the tech-heavy Nasdaq fell 0.2 percent at 6,285.68.
“What’s unfolding at the moment is a little risk aversion,” said Patrick O’Hare of Briefing.com. “It is fair to call it ‘little’ when taking into account that the S&P 500 futures are down just six points after the cash market has increased 3.4 percent since May 17.” Oil prices dipped in New York, the dollar was trading at near seven-month lows and US Treasury yields fell ahead of a week of political developments with the potential to unnerve investors. Britain’s general elections tomorrow come in the wake of the weekend’s deadly terrorist attack, and occur the same day as testimony in Washington by former FBI director James Comey, who was fired by President Donald Trump, on his campaign’s ties to Russia.
The European Central Bank also holds its monetary policy meeting tomorrow. Shares in auto giant General Motors fell 0.6 percent ahead of a shareholder vote yesterday on a proposal to create separate stock classes for growth and dividends. Meanwhile, oil shares suffered in the wake of a diplomatic row between Saudi Arabia and its allies, and Qatar, raising fears that an agreement on oil production limits might fail. Shares in BP gave up 0.8 percent, Shell lost 0.7 percent, Chevron and ConocoPhillips each fell 0.4 percent. ExxonMobil, however, bucked the trend, adding 0.4 percent. Apple gained 0.4 percent after the company unveiled “HomePod,” it’s new music-centered smart home speaker in a bid to challenge giants Amazon and Google.
Global stocks mostly fell as investors digested soft economic data and looked toward the British election later in the week.
France’s CAC 40 lost 0.6 percent to 5,276 and Germany’s DAX fell 1 percent to 12,701. Britain’s FTSE 100 was down 0.2 percent at 7,509. US shares were set to drift lower, with Dow and S&P 500 futures both shedding 0.3 percent.
Investor sentiment was dampened slightly by a weak report on retail sales in the 19country eurozone. Retail sales rose 0.1 percent in April, below expectations. More broadly, markets are also subdued ahead of an increasingly unpredictable UK election tomorrow.The race has tightened between the Conservatives and the Labor party, with uncertain consequences for the country’s Brexit negotiations.
MIDEAST TENSIONS: A diplomatic rift between Qatar and other major Middle Eastern countries also drew attention. Qatar is one of the world’s largest suppliers of natural gas, and any effortto halt its exports could affect the energy market. Investors will also be aware of the potential for greater instability in the region as Qatar clashes diplomatically with regional heavyweights Saudi Arabia, a massive energy supplier, and Egypt. Qatar is also home to some 10,000 American troops and a major US military base.
Japan’s benchmark Nikkei 225 dipped nearly 1.0 percent to finish at 19,979.90.Australia’s S&P/ASX 200 was down 1.5 percent at 5,667.50. South Korean markets were closed for the Memorial Day holiday. Hong Kong’s Hang Seng edged up 0.5 percent to 25,997.14, while the Shanghai Composite rose 0.3 percent to 3,102.13.
Benchmark US crude fell 12 cents to $47.28 a barrel. It fell 26 cents to $47.40 a barrel in New York on Monday. Brent crude, used to price international oils, slipped 14 cents to $49.33 a barrel in London. In currency trading, the euro fell to $1.1257 from $1.1276 late Monday. The dollar weakened to 109.39 yen from 110.48 yen. —Agencies