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27 June 2018
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South korea financial markets (The Total Investment & Insurance
Solutions)
Global markets were subdued on Wednesday as jitters over trade conflicts
between the world's largest economies lingered. Oil prices extended their gains
as the U.S. pushed other countries to cut oil imports from Iran.
KEEPING SCORE: Britain's FTSE 100 was up 0.3 percent at 7,559 while
Germany's DAX edged up 0.1 percent to 12,250. France's CAC 40 was 0.2 percent
higher at 5,291. Futures augured losses on Wall Street. S&P futures dropped
0.4 percent and Dow futures declined 0.5 percent.
ASIA'S DAY: Chinese stocks were the biggest losers, with the Shanghai
Composite Index sinking 1.1 percent to 2,813.18. The index is the worst
performer among major markets this year, losing 14 percent since the start of
this year. Hong Kong's Hang Seng tumbled 1.8 percent to 28,356.26. Japan's
Nikkei 225 fell 0.3 percent to 22,271.77 and South Korea's Kospi dropped 0.4
percent to 2,342.03. Australia's S&P-ASX 200 edged down less than 0.1
percent to 6,195.90. Stocks in Taiwan, Singapore and other Southeast Asian
markets were mostly lower.
CHINESE BEARS: China's market benchmark has tumbled into bear territory
as trade tensions with Washington spook investors. The Shanghai Composite
Index's closing Tuesday was just over 20 percent below its Jan. 24 peak. The
South China Morning Post newspaper in Hong Kong noted that has wiped out $1.6
trillion in stock value — bigger than Canada's annual economic output. The
biggest decliners have included telecoms and tech companies that might be hurt
by U.S. President Donald Trump's proposed restrictions on access to U.S.
markets and technology. Analysts said a combination of factors such as jitters
over trade conflicts, Beijing's move to tighten liquidity and signs of growth
momentum losing steam also contributed to the sell-off.
ANALYST'S TAKE: "To a large extent, the Chinese market is one
driven by speculation," said Jingyi Pan, a market strategist at IG in
Singapore. "With sentiment rolling over itself of late, particularly over
the escalating trade tensions that seem to have no end, it should be of little
surprise to find the market crumbling."
CHINA-US TRADE: China announced a tariff cut for imported soybeans and
some other grains from Asian countries in a possible measure to replace U.S.
supplies in the event Beijing's trade dispute with Washington escalates.
Beijing has announced plans to hike tariffs on U.S. soybeans, for which China
is the biggest export market, in response to Trump's threat of import duty
increases on Chinese goods. The tariff on soybeans will be cut by half to 1.5
percent effective July 1 and those on some other crops such as rapeseed will
fall from as much as 9 percent to as low as zero.
THE QUOTE: Wendy Liu, Nomura's head of China equity research, said some
agreement on U.S.-China trade before the U.S. mid-term election was anticipated
and the Chinese stock market was forecast to calm down during the summer
earnings season. But for the moment, "with lack of visibility on the
U.S.-China trade conflict and some renewed concerns over growth outlook, few
are willing to step in and step up right away."
OIL: Benchmark U.S. crude gained 52 cents to $71.05 per barrel in
electronic trading on the New York Mercantile Exchange. Brent crude, used to
price international oils, added 62 cents to $76.93 per barrel in London. Trump,
who withdrew the U.S. from an Iran nuclear deal in May, is reportedly pushing
foreign nations to cut their oil imports from the country to zero by November,
when sanctions on Iran's energy sector will kick in again.
Currencies: The dollar fell to 109.93 yen from 110.03 yen. The euro
weakened to $1.1623 from $1.1646.The
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