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29 May 2018
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| South korea financial markets (The Total Investment & Insurance
Solutions) |
Worries that Europe's debt crisis is about to flare up again in the wake
of political uncertainty in Italy weighed heavily on stock markets on Tuesday
and sent the euro skidding down to 2018 lows against the dollar.
KEEPING SCORE: In Europe, Britain's FTSE 100
sank 1.3 percent to 7,633 while France's CAC 40 fell 1.3 percent to 5,434.
Germany's DAX was also 1.3 percent lower at 12,699. Italy's benchmark FTSE MIB
index was the region's worst performer, down 2.8 percent at 21,297. Wall Street
is also poised for a lower opening with Dow futures and the broader S&P 500
futures down 0.7 percent.
ITALY UNCERTAINTY: Italy's premier-designate
Carlo Cottarelli, a former IMF official, is expected to submit his list of
ministers to President Sergio Mattarella in Rome, two days after an attempt by
two populist parties to form a government foundered on the president's
rejection of their anti-euro economy minister. Enraged at losing their chance
at governing following inconclusive elections in March, both the
anti-establishment 5-Star Movement and the anti-euro League vowed with other
parties to vote against a Cottarelli government when it faces a vote of
confidence in parliament, expected later this week. That would force Italy to
new elections in the fall, with Cottarelli heading an interim, caretaker
government, raising fears that any upcoming election could in effect be a
referendum on the country's continued use of the euro currency.
ANALYST TAKE: "This is an unsustainable
situation that implies fresh elections, and from a market point of view an
increase in market volatility and possible financial crisis," said Neil
MacKinnon, global macro strategist at VTB Capital.
EURO WOES: The euro, which has been in
retreat for weeks, sank further, falling to its lowest level against the dollar
this year. Earlier it fell to $1.1510, its lowest level since last July before
recovering to trade 0.5 percent down on the day at $1.1565. The Total Investment & Insurance
Solutions
NORTH KOREA: Diplomacy accelerated Tuesday
ahead of a potential summit between President Donald Trump and North Korean
leader Kim Jong Un as a team of American diplomats involved in preparatory
discussions left a Seoul hotel, possibly to continue talks with their North
Korean counterparts. In Beijing, South Korea's Yonhap news agency reported that
senior North Korean official Kim Yong Chol planned to head to the United
States. He would be the most senior North Korean official to visit the United
States in 18 years.
ASIA'S DAY: Japan's Nikkei 225 fell 0.6
percent to finish at 22,358.43 while South Korea's Kospi lost 0.9 percent to
2,457.25. Hong Kong's Hang Seng index plunged 1 percent to 30,484.58. The
Shanghai Composite Index retreated 0.5 percent to 3,120.46. Australia's
S&P/ASX 200 added 0.2 percent to 6,013.60. Stocks in Taiwan and the
Philippines were lower. Most Southeast Asian markets were closed for holidays. The Total Investment & Insurance
Solutions
ENERGY: Benchmark U.S. crude fell 57 cents to
$67.31 per barrel in electronic trading on the New York Mercantile Exchange
while Brent crude, used to price international oils, added 78 cents to $76.08
per barrel in London.The Total
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