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22 January 2019
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| Financial Markets (The Total Investment & Insurance Solutions) |
World markets fell Tuesday after the International Monetary Fund trimmed
its global outlook for 2019 and 2020 and China said its economy grew at the
slowest pace in nearly 30 years.
KEEPING SCORE: Germany's DAX gave up 0.5 percent to 11,076 and France's
CAC 40 was down 0.7 percent at 4,834. Britain's FTSE 100 was 0.5 percent lower
at 6,934. Wall Street, reopening after Martin Luther King Jr. Day, was set for
early losses. Futures for the broad S&P 500 index declined 0.7 percent and
Dow futures dropped 0.6 percent.
THE DAY IN ASIA: Japan's Nikkei 225 index shed 0.5 percent to 20,622.91
and the Kospi in South Korea sank 0.3 percent to 2,117.77. Hong Kong's Hang
Seng lost 0.7 percent to 27,005.45. The Shanghai Composite index fell 1.2
percent to 2,579.70. Australia's S&P ASX 200 slipped 0.5 percent to
5,858.80. Shares rose in Taiwan and Thailand but fell in Singapore.
GLOBAL GROWTH: On Monday, the International Monetary Fund cut its 2019
global growth estimate to 3.5 percent from 3.7 percent, citing trade tensions
and rising interest rates. It also revised its estimate for 2020 to 3.6
percent, down from 3.7 percent. IMF Managing Director Christine Lagarde, who
presented the forecasts at the World Economic Forum in Davos, Switzerland, said
the global economy was growing more slowly than expected amid rising risks.
Earlier in the day, China reported its economy expanded by 6.6 percent in 2018.
This was the slowest pace of growth since 1990 and it fueled fears a trade dispute
with Washington is putting a drag on the world's second largest economy.
ANALYST'S TAKE: "The IMF's prognosis is fairly dire, and the
prescription is a sensible approach of preventive management; to avoid
escalating trade disputes, lower tariffs and build fiscal or financial
buffers," Vishnu Varathan of Mizuho Bank said in a commentary.
BREXIT PLAN: British Prime Minister Theresa May presented her Plan B for
Britain's exit from the European Union on Monday, but it looks a lot like the
original. May said she will get more opinions on a widely-criticized
"backstop" in the plan, aimed at preventing a hard border between the
Republic of Ireland, part of the EU, and the U.K's Northern Ireland after
Brexit. She will then "take the conclusions of those discussions back to
the EU." The bloc has said it will not renegotiate the divorce deal, which
has been resoundingly rejected by Parliament. "This really does feel a bit
like 'Groundhog Day,'" Jeremy Corbyn, the leader of the opposition Labour
Party said. In the 1993 film, a weatherman lives out the same day over and over
again.
ENERGY: U.S. crude lost $1.00 to $52.80 per barrel in electronic trading
on the New York Mercantile Exchange. Brent crude, used to price international
oils, dropped $1.24 to $61.50 per barrel.
CURRENCIES: The dollar eased to 109.45 yen from 109.65 yen late Monday.
The euro slipped to $1.1360 from $1.1366. The British pound was steady at
$1.2893.
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