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02 January 2018
 |
| financial markets (The Total Investment & Insurance Solutions) |
Stock markets started the new year with a tumble, as disappointing
Chinese economic data on Wednesday renewed concerns that a global trade war is
weighing on growth.
KEEPING SCORE: In Europe, France's CAC 40
fell 1.6 percent to 4,653 and Germany's DAX retreated 0.2 percent to 10,531.
Both had opened with losses in excess of 2 percent and 1 percent, respectively.
London's FTSE 100 was down 0.9 percent to 6,667. On Wall Street, futures for
the Standard & Poor's 500 and for the Dow Jones Industrial Average were
both down 1.4 percent.
ASIA'S DAY: The Shanghai Composite Index fell
1.2 percent to 2,465.29 and Hong Kong's Hang Seng lost 2.8 percent to
25,130.35. Seoul's Kospi gave up 1.5 percent to 2,010.00 and Sydney's
S&P-ASX 200 sank 1.2 percent to 5,557.80. India's Sensex shed 1.2 percent
to 35,817.25 and Singapore and Taiwan also declined. Tokyo's markets were
closed.
CHINESE FACTORIES: A government survey and
one by a major business magazine showed Chinese manufacturing weakened in
December as global and domestic demand cooled. Forecasters said that could send
shockwaves through other economies, particularly in Asia, that supply raw
materials and components. Chinese export growth has held up as producers rushed
to fill orders before possible new U.S. tariff hikes in Washington's trade
battle with Beijing, but forecasters said that effect may be fading.
ANALYST'S COMMENT: The Chinese slowdown
"raises a few red flags," said Mizuho Bank's Vishnu Varathan in a
report. The slide is "potentially symptomatic of far sharper underlying
demand pullback," he said.
US-CHINA TRADE TALKS: Investors are looking
ahead to talks this month aimed at settling a U.S.-Chinese tariff battle that
threatens to dampen global economic growth. Presidents Donald Trump and Xi
Jinping agreed Dec. 1 to a 90-day suspension of further tariff hikes in their
fight over Beijing's technology policy but left in place penalties already
imposed. No date has been announced but both sides have expressed interest in a
settlement. Economists say the 90-day window is likely too small to resolve the
full range of issues that bedevil their relations. Mihir Kapadia, CEO of Sun
Global Investments, says the uncertainty in financial markets will
"continue until further clarity emerges from the U.S. and China
talks."
CURRENCY: The dollar declined to 109.16 yen
from Monday's 109.67. The euro retreated to $1.1430 from $1.1466.
ENERGY: Benchmark U.S. crude lost 44 cents to
$44.97 per barrel in electronic trading on the New York Mercantile Exchange.
The contract gained 8 cents on Monday. Brent crude, used to price international
oils, slumped 55 cents to $53.25 per barrel in London. It added 59 cents the
previous session.The Total Investment
& Insurance Solutions
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