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30 May 2018
 |
| China financial markets (The Total Investment & Insurance
Solutions) |
Stock markets recovered their poise Wednesday amid hopes for a
resolution in Italy's political turmoil that may put a halt to talk of another
election this year.
KEEPING SCORE: In Europe, Germany's DAX climbed 0.6 percent to 12,748
while the FTSE 100 index of leading British shares rose 0.3 percent to 7,654.
Italy's FTSE MIB was the region's standout, jumping 2 percent to 21,180. The
CAC 40 in France though, underperformed, trading 0.4 percent lower at 5,415.
U.S. stocks were poised for a solid open, with Dow futures and the broader
S&P 500 futures up 0.5 percent.
ITALIAN UNCERTAINTY: The main focus in financial markets this week has
been Italy with fears growing that a political impasse could lead to another
general election that could in effect become a referendum on the pros and cons
of the country's use of the euro currency. However, on Wednesday, hopes were
raised that an election could be avoided after Italy's premier-designate, Carlo
Cottarelli, said "new possibilities" had emerged to form a government
based on the outcome of the March 4 vote, and that he wanted to give the option
time to mature given the negative market reaction to the prospect of new
elections. Efforts to create a so-called "political" government failed
over the weekend after President Sergio Mattarella vetoed an economy minister
proposed by the 5-Star Movement and League, the two big vote-getters in March
which had come together to form a populist alliance.
ANALYST TAKE: "If a government can be formed that receives the
stamp of approval from Mattarella and is therefore seen as not posing a threat
to Italy's place in the eurozone, then this will come as a relief to markets in
the near-term," said Craig Erlam, senior market analyst at OANDA.
CURRENCIES: With hopes raised that another Italian election will be
avoided the euro rallied from near-year lows against the dollar, trading 0.9
percent higher at $1.1639. The dollar, meanwhile, rose 0.1 percent to 108.90
yen.
CHINA TRADE: A U.S. business group said American companies in China are
uneasy about Washington's threat of export and investment controls in a trade
dispute with Beijing but see them as a possible way to achieve fairer operating
conditions. Commerce Secretary Wilbur Ross was due in Beijing on Saturday after
the White House renewed its threat of 25 percent tariffs on $50 billion of
Chinese goods. Washington proposed curbs on Chinese investment and purchases of
high-tech goods.
ASIA'S DAY: Japan's Nikkei 225 stock index dropped 1.5 percent to 22,018.52.
South Korea's Kospi dropped 2.0 percent to 2,409.03. The Hang Seng in Hong Kong
slipped 1.4 percent to 30,056.79 and the Shanghai Composite index fell 2.5
percent to 3,041.44. Australia's S&P ASX 200 fell 0.5 percent to 5,984.70.
Shares fell in Southeast Asia and Taiwan.
ENERGY: U.S. crude oil climbed 43 cents to $67.16 per barrel in
electronic trading on the New York Mercantile Exchange while Brent crude, used
to price international oils, added 71 cent to $76.20 a barrel in London.The Total Investment & Insurance
Solutions
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