Geopolitical events push European stocks lower
On Tuesday the British pound gained with bonds as Prime Minister Theresa May announced an early general election. European stocks declined as traders caught up with a swathe of geopolitical events following the long weekend.
Sterling swung from gain to loss and back again versus the dollar before May set the vote for June 8. U.K. stocks fell by the most since January. Meanwhile, the Stoxx Europe 600 Index dropped to the lowest level in about three weeks as mining shares plunged, and government bonds in the region mostly rose as the build up to the French election intensified. Iron ore reeled as Citigroup Inc. said it’s bearish on the raw material’s outlook.
A bounce in U.S. stocks Monday failed to cheer investors in the European session, as the standoff over North Korea’s nuclear weapons program rumbles on and the French presidential vote looms. Two candidates who want to take the country out of Europe’s common currency remain in contention in the most unpredictable race in recent history.
Investors returned from Easter holiday in Hong Kong and Australia to send equities lower, leading declines in the Asia Pacific region.
The MSCI Asia Pacific Index dropped 0.5 percent as of 3:55 p.m. Singapore time. The Hang Seng Composite Enterprises Index in Hong Kong fell 1.6 percent to the lowest since Feb. 8, catching up with losses on mainland exchanges. Australia’s S&P/ASX 200 declined 0.9 percent as a continued slump in iron ore weighed on commodity producers.
Japan’s Topix gained 0.4 percent as the yen weakened on Treasury Secretary Steven Mnuchin comment that the dollar’s strength is “a good thing.” Investors continued to assess the geopolitical risks even without a major international incident.
Oil traded at its lowest in more than a week in New York on signs U.S. production is continuing to recover, undermining OPEC’s efforts to clear a global glut.
This article was compiled by BOV Asset Management Limited, a member of the BOV Group. BOV Asset Management,TG Complex, Suite 2, Level 3, Brewery Str., Mriehel BKR 3000. Email: infoassetmanagement@bov.com Internet address: www.bovassetmanagement.com. BOV Asset Management is licensed by the MFSA.