Global equities mixed as trade worries loom; Wall Street slips
Asian investors battle to finish volatile week with some stability
NEW YORK, Dec 8, (Agencies): Concerns over China-US trade tensions gave European shares their worst week of losses in two months and sank US stocks on Friday, overshadowing the lift from higher oil prices and jobs data.
While Europe was higher on the day with a small recovery after three sessions of heavy losses, the trade standoff between Washington and Beijing was still a major lingering worry for investors.
The pan-European STOXX 600 index rose 0.62 percent, while an index of London’s 100 largest listed companies rose 1.1 percent.
The Dow Jones Industrial Average fell 558.72 points, or 2.24 percent, to 24,388.95, the S&P 500 lost 62.87 points, or 2.33 percent, to 2,633.08 and the Nasdaq Composite dropped 219.01 points, or 3.05 percent, to 6,969.25.
Wall Street saw its biggest weekly losses since March, led by declines in big internet and technology shares.
The fall was a reversal from earlier in the day, when stocks were higher on US labor data that showed employers hired fewer workers than expected in November.
That supported a view that US growth is moderating and the Federal Reserve may stop raising rates sooner than previously thought.
MSCI’s gauge of stocks across the globe shed 1.11 percent.
Stock markets around the world tumbled on Thursday after Canadian officials announced the Dec 1 arrest of the chief financial officer of Chinese smartphone maker Huawei for extradition to the United States. The arrest was seen as an added threat to the resolution of a trade war between the world’s top two economies.
Also contributing to this week’s sell-off were rising concerns about a US economic slowdown signaled by a flattening Treasury yield curve.
The front half of the yield curve remained inverted after two-year and three-year yields rose above five-year yields for the first time in over a decade earlier this week.
That inversion has stoked speculation about whether a US recession is looming.
The US dollar weakened against major currencies after the US jobs data.
US
Wall Street closed out a bruising week on an ugly note on Friday as unease over the US-China trade war prompted another sell-off, while an OPEC deal lifted oil prices.
Major US indices fell more than two percent to close the market’s worst week since March and one that left both the Dow and S&P 500 in negative territory for the year.
European and Asian markets were mixed, with London, Paris and Tokyo gaining and Hong Kong and Frankfurt falling modestly.
The Dow finished 2.2 percent lower at 24,388.95. The blue-chip index lost 4.5 percent for the week.
The declines on Wall Street followed a mixed US jobs report that had initially helped lift stocks early in the session, in part because it was seen as boosting the likelihood that the US Federal Reserve could soon pause interest rate hikes.
But the market quickly went negative, with the losses accelerating following hawkish comments from White House trade advisor Peter Navarro in a CNN interview that emphasized that the United States would raise tariffs on China if a deal is not reached.
Investors have been rattled by the US-initiated arrest of a top Chinese Huawei executive that was seen as exacerbating the US-China clash.
Huawei Chief Financial Officer Meng Wanzhou, who appeared in a Canadian court on Friday, faces US fraud charges related to sanctionsbusting business dealings with Iran.
“The market is kind of falling back into our interpretation of where we are in the US-China trade war,” said Art Hogan, chief market strategist at B. Riley FBR.
The Huawei arrest dampened expectations that the United States and China could quickly hash out a deal, Hogan added.
Europe
European shares staged a small recovery on Friday snapping three days of heavy losses, but stocks notched up their worst week of losses in two months amid growing worries that the US-China trade row may erupt again and slowing global economic growth.
The euro zone’s STOXX index closed up 0.6 percent but near the session lows as tech losses on Wall Street weighed even as oil rallied and a tepid US jobs report tempered some expectations for fast US interest rates hikes.
Germany’s DAX, with its big exposure to the trade war, has joined the long list of indexes or stocks to fall into bear territory in 2018. It was the only major bourse to close in the red on the day.
Car makers, which are most vulnerable to trade worries, were up only 0.1 percent after falling more than 4 percent during the previous session.
In M&A news, Finnish retailer Amer Sports jumped 9 percent to the top of the STOXXE after a consortium led by China’s Anta Sports launched a takeover bid valuing the company at 4.6 billion euros ($5.23 billion).
A glimpse of optimism was provided by the market debut of Britain’s AJ Bell. The investment platform provider bucked a trend of lacklustre European initial public offerings, with the shares rising more than 37.5 percent.
Germany’s Fresenius was the biggest loser, down 17 percent for the healthcare company’s worst performance on record after its profit warning.
Fresenius Medical Care shares were down 8.5 percent, with both dragging the DAX down 0.21 percent.
Asia
Asian investors battled to finish a volatile week with some stability Friday as they weigh the outlook for China-US trade talks and uncertainty in oil markets, while looking ahead to the release of key US jobs data.
After the furious selling of the past two days, there was some optimism after a report said the Federal Reserve could slow down its pace of interest rate hikes next year, providing some much-needed relief to under-pressure dealers.
The general mood across trading floors is of unease, just days after the euphoria of Donald Trump’s tariffs ceasefire deal with China’s Xi Jinping at the G20 that put the row off for 90 days while they try to resolve the crisis.
Tokyo closed 0.8 percent higher, while Shanghai ended flat. Sydney edged up 0.4 percent, Seoul gained 0.3 percent, while Wellington, Jakarta and Taipei were also higher. Singapore was flat.