Global equities give up gains over deal
■
Global markets gave up most of Monday’s gains as investors seemed to secondguess the likelihood of a trade deal between China and the US.
US markets opened lower while Asian and European shares scrambled to get confirmation on the truce reached during the G20 meeting in Argentina, where US President Donald Trump seemed to reach an accord with Chinese premiere Xi Jinping.
The US has agreed to a 90day moratorium on threats to raise tariffs on more than $200 billion (Dh734.5 billion) in annual imports from 10 per cent to 25 per cent; however, Chinese and US officials suggested that there’s a long way to go before any de-escalation begins.
Trump tweeted that China has agreed to reduce and remove tariffs on cars coming into China from the US. However, neither Treasury Secretary Steven Mnuchin nor Trump’s top economic adviser Larry Kudlow were able to confirm the news.
‘Conflicting messages’
“The bullish spirits faded so quickly amid rising doubts and conflicting messages received from top officials in the Trump Administration,” Hussain Sayed, Chief Market Strategist at FXTM, said.
“Such inconsistent messages will leave markets guessing and struggling to reach a conclusion, thus leading to volatile price action in financial assets.”
The DJIA and the S&P 500 index had gained more than a per cent in the previous session. European and Asian equities also traded lower. The STOXX Europe 600 Index was 0.51 per cent lower at 359.32. The Asia Dow Index USD closed 0.48 per cent lower at 3,279.62.
“The initial relief rally was never going to last, investors need more detail now in order for that risk on sentiment to survive. So far that detail has not been coming through and investors have more questions than answers. Once again, we find ourselves on that familiar territory of trading sentiment fluctuations stemming from trade war headlines,” Jasper Lawler, Head of Research at London Capital Group, said.
Worries about a trade war, that was seen impeding growth, had been weighing on trading sentiment, and that trimmed gains to 4.48 per cent on the DJIA so far in the year after rising as high as 27,000.
At a risk
Techically, are at a risk.
“The risks are skewed to the downside for equities — especially given the developing technical developments on the indices, with the Dow and S&P both currently showing shooting star candlestick pattern on their respective daily charts,” Fawad Razaqzada, Market Analyst, Forex.com said.
the US
indices